What’s cooking in the IPO kitchen?
AIM
Springfield Properties—Scottish housebuilder. Intention to float. Offer TBA “Our turnover exceeded £100 million for the first time this year and now we employ around 500 people. This IPO is the next step in our growth.”
Warehouse REIT - The Company will invest in a diversified portfolio of UK warehouse assets located in urban areas. The Company is targeting a dividend yield of 5.5p equivalent to a yield of 5.5 percent. for the year ending 31 March 2019. Issue price 100p. Offer TBA. Due 20 Sep
OnTheMarket—Intention to float on AIM to raise c. £50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
Main Market Premium Listing
People’s Investment Trust—Objective of sustainable wealth creation. Also to list on the Social Stock Exchange. Targeting £125m raise on 17 Oct. No performance fees or executive bonuses in order to focus on long term rather than short term performance.
Charter Court Financial Services Group—Intention to float. Specialist lender serving the UK residential mortgage market. The net mortgage loan book stood at £4.4 billion as at 30 June 2017 growing at a compound annual growth rate of 92 percent since 31 December 2014. Part vendor sale and £20m primary raise.
ContourGlobal LP—Report on Bloomberg that the thermal energy power generator is considering a London listing.
Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 15 September 2017
Breakfast buffet
Green Dragon Gas (LON:GDG) 57.50p £97.55m
“One of the largest independent companies involved in the production and sale of coal bed methane (CBM) gas in China, announced that the China National Development and Reform Commission (NDRC) has approved a Project Code for the Overall Development Plan (ODP) on the Greka Chengzhuang Block (GCZ), confirming its final approval. State approval of the project code means that the Company can commence the Block's ODP and further develop the acreage. The Company has a 47% participating interest in the GCZ Block with its 53% partner, China National Petroleum Corporation (CNPC).”
Contract area is 67 km² of which ODP covers an area of 33 km², with proved reserves of approximately 275 Bcf. 147 additional wells planned by end of 2018. Gross production capacity is estimated to be 6.36 Bcf per year. The development cost for GCZ will be c.$53.80m over 2017 and 2018. CNPC will invest $28.51m according to its 53% participating interest and the Company $25.28m based on its 47% participating interest in the Block. FYDec17E rev £32.38m and £1.77m loss.
Next Fifteen Comms (LON:NFC) 417p £308.4m
“Next 15, the digital communications group, announced the acquisition of the entire issued share capital of Elvis Communications Limited (“Elvis”), a UK based integrated digital agency with a focus on consumer brands.
The consideration for the acquisition is £5.5m in cash, representing a 5.5 multiple of 2017 forecast adjusted EBITDA. The consideration comprises a £5m up-front payment for the business followed by a deferred payment of up to £0.5m (subject to adjustments). The acquisition is expected to be modestly earnings enhancing for Next15 in the current financial year.
For the year ended 31 December 2016, Elvis reported adjusted net revenues of £4.7m, adjusted EBITDA of £0.75m and net assets of £0.9m. Elvis is to be acquired on a cash-free, debt-free basis.”
FYJan18E revenue £197.01m and PBT £29.54m. PE c.16 x yield c1..4%.
Ethernity Networks (LON:ENET) 179p £59.67m
HY Jun 17 results from the network data processing technology used in high-end carrier Ethernet applications across the telecom, mobile, security and data centre markets.
·Revenues of $988,995 (H1 2016: $1,309,138)
·Gross profit of $857,884 (H1 2016: $662,674)
·EBITDA of $441,292 (EBITDA H1 2016: $278,504)
·Operating Profit of $379,884 (H1 2016 $263,578)
·Strong cash balance at 30 June 2017 of $18.2m. The Board remains confident that Ethernity will meet its long-term objectives and will be well positioned as one of the key solutions providers in its marketplace. Network service providers are requiring more flexible solutions to their technology and network needs for offloading support of new data appliances introduced by the market. Ethernity believes it has the best-in-class system solutions to address these needs. Trading in-line with its forecast and expects to meet its future targets. FYDec17E rev £3m, PBT £1m.
Echo Energy (LON:ECHO) 10.88p £37.95m
The South and Central American focused upstream gas company, announced the award of a seismic reprocessing contract for the 3D seismic data over the Huayco and Rio Salado blocks, onshore Bolivia. Following a competitive tender process the contract for reprocessing the existing 3D seismic across the Huayco and Rio Salado blocks has been awarded to DMT Petrologic who have extensive experience in the reprocessing of vintage data in similar thrust belt areas. The initial reprocessed tranche is anticipated by the end of November 2017 with the full scope of the work anticipated to be completed during Q1 2018. The acquisition of an interest by Echo in Huayco and/or Rio Salado remains contingent on final commercial terms being agreed and accordingly the Company does not have an interest or the right to acquire any interest at this stage during the non-exclusive evaluation period. Echo will also shortly be inviting investors to register their interest in an investor trip to the region in early 2018.
Kellan Group (LON:KLN) 0.6p £2.04m
“Further to the announcement dated 5 Jan 2017, the Company announced that it has agreed terms to purchase from BMN Commercial Limited ("BMN Commercial") all of the outstanding Secured Fixed Rate Secured Loan Notes 2022 (the "Loan Notes") that were issued to BMN Commercial pursuant to the terms of a Fixed Rate Secured Loan Note Instrument dated 26 October 2016 ("2016 Loan Note Instrument") and which Loan Notes are currently outstanding in the principal sum of £523,000. The purchase price for all the Loan Notes is £366,100 (such sum being equal to 70 % of the aggregate principal amount ("Purchase Price")). The Purchase Price will be funded by drawdown on the existing confidential invoice discounting facility provided to the Company by Barclays. The Barclays drawdown is at a substantially lower rate of 1.6% over base (1.85%), than the interest on the Loan Notes (5%) and ensures the Company uses its cheapest means of funding first. In addition, the purchase of the Loan Notes will improve the balance sheet to the extent of the discount obtained.”
Adams Finance Asia (LON:ADAM) 0.535p £102.7m
The “pan-Asian diversified investment vehicle, announced the disposal of the Group's interest in Global Pharm Holdings Group Inc. ("Global Pharm") (the "Transaction"). The Transaction is in line with the Company's objective of maximising shareholder returns through a managed disposal programme of its legacy portfolio where commercially viable and reinvesting the proceeds in pan-Asian income producing assets with capital gain potential.” Interest being sold for $15.6m vs book value of $17.3m. Cash due within 120 days. We could see no forecasts.
Comptoir Group (LON:COM) 17p £16.32m
HYJun17 results from the operator of Lebanese and Eastern Mediterranean restaurants.
·Group revenue of £13.1m up by 36.1% (2016: £9.6m). Gross profit of £9.5m up by 36.4% (2016: £7m). Adjusted EBITDA before highlighted items of £0.2m down by 81% (2016: £1.0m). Net cash and cash equivalents at the period end of £0.1m (30 June 2016: £8.0m). Comptoir Gloucester Road opened in January 2017 and Comptoir Reading opened in July 2017 and trading in line with Board expectation. Currently own and operate 23 restaurants, with a further 2 franchise restaurants. With new openings/cost savings, together with the continuing of recent stronger trading that the Group has experienced in July and August, there is a degree of confidence of achieving current expectations for the full 2017 financial year. However, this does assume that there are no material factors which could impact on the results including significant delays in the opening of the new sites or macro-economic factors outside the Group's control. FYDec17E rev £28m, £0.7m loss.
Tungsten Corporation (LON:TUNG) 62p £74.54m
AGM Statement from the global supply chain enabler. “Unaudited revenue of £8.3 million in the three months to 31 July 2017 ("Q1-FY18") was 12% higher than the same period in the prior year on a constant currency basis and in line with the Board's expectations. In Q1 we added 3 new Buyer customers to Tungsten Network. These included a multi-year global rollout of e-invoicing services for Carlsberg Group and a further sale of our new Invoice Data Capture product, which digitises non-electronic invoices and therefore enables quicker achievement of some of the benefits of digital automation. We also continued to renew the contracts of existing Buyers on Tungsten Network to better reflect the value created by our services, without any notable losses. We continue to open new sales channels to increase our reach and have entered into a strategic partnership with Tech Mahindra to push automation in newer markets and increase our presence globally.” FYApr18E rev £36.6m £9.05m loss.
DX Group (LON:DX) 7.66p £15.36m
DX announces that, during the preparation of its final results for the year ended 30 June 2017, it has become aware of an incorrect application of accounting policies relating to lease incentives on one of its sites. Following appropriate application of the policies, there will be a non-cash impact of £1.8m to previously guided underlying profits for the year ended 30 June 2017. This does not impact prior accounting periods. Under the correct accounting treatment, the £1.8m lease incentive will be credited back over the remaining c.10 year term of the lease.
The audit of the full year results remains in progress and the Company continues to expect to announce its preliminary results in early Q4. FYJun17E revenue £296m and £1.95m PBT PE 10x.
Diurnal Group (LON:DNL) 133.5p £69.7m
The speciality pharmaceutical company targeting patient needs in chronic endocrine (hormonal) diseases, announces that data from the pivotal Phase III trial for its lead product Infacort® are published in Clinical Endocrinology. The paper titled, "Absorption and tolerability of taste-masked hydrocortisone granules in neonates, infants and children under 6 years of age with adrenal insufficiency" is published on an open access basis. An oral presentation of the data by one of the investigators, Dr. Oliver Blankenstein, will take place on Saturday 16 September 2017 at the joint meeting of the European Society of Paediatric Endocrinology and the Paediatric Endocrine Society in Washington DC; the largest global gathering of more than 4,000 Paediatric Endocrinologists from over 100 countries.