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Small Cap Wrap -

Breakfast Buffet Sareum Holdings* 2.225p £72.7m (SAR.L) Late yesterday morning the specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, announced that its application for approximately £174,000 grant award  by UK Research & Innovation (“UKRI”) to investigate the therapeutic potential of SDC-1801...

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*A corporate client of Hybridan LLP

 

Dish of the day

Wheaton precious Metals (WPM.L) - Secondary listing bringing one of the world’s largest precious metal streaming companies to the London Stock Exchange. Mkt Cap £16.4bn.

Off the menu

No Leavers Today

 

What’s cooking in the IPO kitchen?

Verici DX—developer of advanced clinical diagnostics for organ transplant, intends to apply to have its issued share capital, as enlarged by a proposed placing, subscription . The Restricted Offer is only available to certain persons, being persons who held the beneficial title to any A Shares of £0.001 each in the capital of the Company on 10 July 2020 (the "Record Date") whose registered address is in the UK  (being persons recorded on the register of members of Renalytix AI plc on 9 July 2020). £14.5m fundraise. Mkt Cap c.£28.3m. Due 3 November

SourceBio International to list on AIM. Offer TBC.  Due 29 Oct. Press reports suggest raise of up to £35m.  Services include Healthcare Diagnostics, Genomics, Stability Storage and infectious Disease Testing - since May 2020, the Group has provided COVID-19 Antigen RT-PCR testing services.

SDIC Holdings a leading power generation company in China is to list on the standard segment of the Official List and to trading on the Shanghai-London Stock Connect segment of the main market for listed securities of London Stock Exchange. Due on or around 22 Oct. Gross proceeds from the Offering are expected to amount to between approximately USD 220 million and USD 240 million. The proceeds will be used for expanding the Group's renewable energy business overseas and repaying the Group's offshore indebtedness.

Round Hill Music Royalty fund to IPO on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of a placing and offer for subscription targeting the issue of 375 million ordinary shares  at an issue price of US$1.00 per Ordinary Share.  The Company's Investment Objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high quality, music intellectual property.  Due mid-November.

Meritwell II intends to list on the Specialist Funds Segment of the LSE raising up to £250m. The Placing will provide UK institutions with the opportunity to "swap" illiquid holdings which have become time and resource consuming holdings, at their bid price, in return for ordinary shares in the Company. Due 26 Oct.

Mailbox REIT PLC , a newly formed single asset company which owns the Mailbox , a large prime office-led mixed use property in Birmingham which has been independently valued at £179m, announced its intention to raise up to £62.5m  MailBox REIT  will apply for the Ordinary Shares be admitted to trading  on the IPSX Prime segment of International Property Securities Exchange (IPSX ).   IPSX is a new Regulated Investment Exchange regulated by the FCA and is the world's first such exchange dedicated to the initial public offering and secondary market trading of companies owning single institutional grade real estate assets and multiple assets with commonality. Due  November.

Tirupati Graphite, the fully-integrated, cash generative, specialist graphite and graphene producer with operations in Madagascar and India, announced its potential intention to undertake an initial public offering on the LSE (standard listing). Timing tbc

Umuthi Healthcare Solutions Plc, the technology led healthcare business focused on the distribution of pharmaceuticals and the provision of medical facilities in remote areas, seeking admission to the Standard Listing segment of the Official List.  Timing tbc

Kibo Energy PLC, the multi-asset Africa focused energy Company, is seeking admission for its 100% owned UK subsidiary Sloane Developments Ltd , which will be renamed Mast Energy Developments PLC (MED), to the Standard List of the London Stock Exchange plc. Targeted for Q4 2020. The MED business strategy is to acquire and develop a portfolio of flexible small-scale power generation assets, exploiting a growth niche market in the UK for Reserve Power generation to balance out the national grid at critical times.  

 

Breakfast Buffet

Sareum Holdings* 2.225p £72.7m (SAR.L)

Late yesterday morning the specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, announced that its application for approximately £174,000 grant award  by UK Research & Innovation (“UKRI”) to investigate the therapeutic potential of SDC-1801, its selective, small molecule TYK2/JAK1 kinase inhibitor, in severe phase Covid-19, has been conditionally approved.

The Grant is subject to the UKRI’s standard financial review of the Company and the submission of additional documentation, which the Company has provided to the UKRI and is now awaiting a formal grant offer letter . Subject to the Offer Letter being received and the Grant being provided, Sareum has agreed to contribute an additional c.£64,000 in cash and commit additional management time to the project, which is expected to take approximately six months to complete.

 

Hargreaves Services 205p £66.2m (HSP.L)

AGM Statement from the diversified group delivering services to the industrial and property sectors. “Trading for the first four months of the year has been satisfactory and in line with the Board’s expectations.   As previously reported, COVID-19 has had a limited direct effect on our business activities, with the main impact being the previously reported delay in completion of infrastructure works at the Blindwells site near Edinburgh, due to the three month cessation of site based activities in Scotland. The Board expects to be able to announce the completion of the sale of the first parcel of land there in the near future.

I am pleased to announce that our Industrial Services business in Hong Kong has been appointed by CLP Power to two key contracts at Castle Peak and Black Point power stations. The work encompasses the maintenance, repair and refurbishment of boilers, condensers and other critical components. The contracts are for three years with options for extension for up to two more years. These contracts, together with the five year NEC contract announced last year, provide the Asian business with strong revenue visibility and a platform for growth.

Additionally, our Industrial Services business in the UK has been appointed by Severn Trent Water to a three year Mechanical Services framework contract for the provision of maintenance, repair, removal and installation of both clean and waste water assets.”

 

Image Scan 2.4p £3.3m (IGE.L)

The specialist supplier of X-ray screening systems to the security and industrial inspection markets provided a pre-close trading update ahead of its results for the year ended 30 September 2020.

Sales increased 50% to £3.5m (2019: £2.3m) at a gross margin of 49% (2019: 54%) · Unaudited pre-tax trading profit of £112k (2019: Loss of £402k)

New cabinet X-ray system launched · Exciting new partnership with major security technology company

Period-end order book of £633k (2019: £1.7m) · Cash generation of £769k (2019: -£142k) giving a year-end balance of £1,409m (2019: £640k)

 

Franchise Brands 96.5p £92.4m (FRAN.L)

Q3 Sep 20 update from the  multi-brand franchise business . Strong recovery from Metro Rod with September system sales up 9% on comparative month in prior year. ChipsAway and Ovenclean trading at pre COVID-19 levels. Board confident of meeting consensus market expectations for 2020.

 

Diaceutics 123.5 £103.8 (DXRX.L)

–  Diaceutics launches their proprietary diagnostic network for precision medicine, DXRX- The Diagnostic Network® to solve the significant issues facing testing ecosystem

–  The platform provides access to a pipeline of global diagnostic testing data on one secure platform and enables industry-wide collaboration which is expected to accelerate biomarker test adoption and time to peak therapy prescription from years to just months

–  Early collaborations are now live on DXRX with pharma, labs and diagnostic companies benefitting from the technology in EU, US and Asian markets

 

1PM 16.5p £14.9m (OPM.L)

The independent specialist finance provider, has received accreditation from British Business Bank to expand its lending under the UK Government’s Coronavirus Business Interruption Loan Scheme CBILS to support credit worthy UK businesses. 

As announced on 5 May 2020, British Business Bank approved 1pm Finance (UK) Ltd, a wholly-owned subsidiary of 1pm plc, as an accredited lender under CBILS. This accreditation enabled the Group to expand its range of lending products to viable businesses across the UK that had been impacted by the COVID-19 pandemic to include CBILS leases and loans. CBILS lending benefits from a government-backed guarantee for the repayments due from borrowers. Originally set to end on 30 September 2020, the UK Government recently announced that the CBILS scheme would remain open for applications until 30 November 2020.

Since its launch, CBILS lending has become an important part of the Group’s business loan and lease proposition with the initial lending allocation almost fully utilised. As such, the Group sought and has been approved for a significant uplift in its allocation. This will enable the Group to continue promoting and deploying the CBILS product through to the scheme’s extended closure date.

 

Altus Strategies 61p £42.76m (ALS.L)

Results from metallurgical testwork on oxide and sulphide samples from the Company’s 100 % owned Diba gold project  in western Mali. The work was undertaken to test the amenability of Diba ores to carbon-in-leach (“CIL”) and heap leach processing.

Excellent gold recoveries from oxide and sulphide samples from Diba gold project in Mali:

–  98.3 % recovery at moderate (75 μm) grind size on oxide sample for CIL scenario

–  86.8 % recovery at moderate (75 μm) grind size of sulphide samples for CIL scenario

–  95.8 % recovery at coarse (6.3 mm) crush size on oxide sample for heap leach scenario

Expectation for a significant upgrade to existing Preliminary Economic Assessment (“PEA“). · Existing PEA which applied a gold price of US$1,500/oz and a 10 % discount rate:

–  Generated a robust US$81M (post-tax) net present value  –  Modelled 80 % gold recovery for oxide heap leaching, compared to 95.8 % reported –  Did not envisage a CIL processing route, thereby excluded all sulphide ounces

Significant resource growth and discovery potential considered to exist at Diba

 

Falanx Group 0.975p £5.1m (FLX.L)

The provider of cyber security and strategic intelligence services, announced that its cyber security division, Falanx Cyber  Defence Ltd has joined the SolarWinds Technology Alliance Program (TAP), a growing group of trusted vendors that offer a variety of integrations and services to help MSP (Managed Service Provider) partners better serve their customers. Through TAP, Falanx will make its market leading cybersecurity monitoring services and managed endpoint detection and response offerings available directly to SolarWinds MSP partners, as an integrated part of their monitoring and management platforms.

 

Maestrano 10.5p £15.3m (MNO.L)

The Artificial Intelligence platform for transport corridor analytics, announces unaudited results for the three months ending 30 September 2020.

Total revenue up 332% in reported currency and 346% at constant currency to £436k,

Total expenses increased by 318% (329% in constant currency) reflecting increased investment in product and market development.

Cash balance at 30/09/20 was £1,143,762 with Net Assets of £2,615,555.

Nick Smith, VP Sales of Maestrano, commented:

” The business has performed very well in our first fiscal quarter, driven by strong uptake and user acceptance from our major rail corridor analytics contracts, together with excellent results from our Nextcore distributors around the world . There are positive sales discussions in progress across our major markets, leveraging the technology benefits already achieved. We are engaging with both new and existing clients, demonstrating and delivering solutions, helping to improve safety and reduce operating costs. “

 

SysGroup 33p £16.3m (SYS.L)

The managed IT services and cloud hosting provider, provided a trading update for the half year ended 30 September 2020.

Revenue for the first half of the year is expected to be broadly in line with the comparative period last year. Adjusted EBITDA is expected to show an increase of at least 15%. Cash conversion continues to be strong and the Group ended the period with over £1.0m of net cash (H1 FY20: net debt of £(0.7)m), having made the final deferred consideration payment of £0.975m relating to the Certus IT acquisition  during the period. The Company utilised the ability to defer a VAT payment, totalling £0.28m, which it intends to repay in full no later than 31 March 2021. No other government support schemes, such as the COVID Job Retention Scheme, have been used by the Group.

 

 

 

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Derren Nathan

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