Small Cap Wrap – DXS International, Amryt Pharma, Kropz and more…
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Dish of the day
Foresight Group , the award-winning infrastructure and private equity investment manager has IPO’d on the Main Market (Premium). Offer price announced today at 420p . GBP455m market cap. GBP35m new money, GBP192m sell down. As at 30 September 2020, Foresight Group had AuM of approximately GBP6.8 billion and managed 292 infrastructure assets and 104 private equity investments on behalf of 33 Foresight investment vehicles. Foresight Infrastructure accounted for 90.2% of the Company’s AuM (Foresight Private Equity: 9.8%) and 72.6% of the GBP32.4 million revenue generated for the six months ended 30 September 2020 (Foresight Private Equity: 27.4%).
Off the menu
No leavers today
What’s cooking in the IPO kitchen?
Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation GBP20m raising c. GBP8m “to finalise the development and launch of a range of the Company’s premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.”
Kanabo Group (RTO by Spinnaker Opportunities SOP.L) on the main market (standard). Raising GBP6m, enlarged mkt cap GBP23.4m. Kanabo focuses on the distribution of Cannabis-derived products for medical patients, and non-THC products for CBD consumers . Due 16 Feb.
NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a GBP300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company’s target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March
Auction Technology Group is considering an IPO on the Main Market. The Group operates six world-leading online Marketplaces and proprietary global auction platform technology for curated online auctions . In FY20 the Group delivered pro forma revenue of GBP52.3 million, supported by notable underlying year-on-year growth from both Standalone ATG Group and Standalone Proxibid Group (12.4 per cent. and 40.4 per cent., respectively). For the same period, the Group delivered a strong profitability performance of GBP22.3 million pro forma Adjusted EBITDA representing a pro forma Adjusted EBITDA margin of 42.6 per cent.
Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue GBP400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021.
Cordiant Digital Infrastructure to admit its shares on the Specialist Fund Segment of the Main Market of the London Stock Exchange . Targeting a GBP300m raise. Cordiant invests in global infrastructure and real assets, running infrastructure private equity and infrastructure private credit strategies through limited partnership funds and managed accounts. Due 16 Feb
4basebio UK Societas is a specialist life sciences group focused on therapeutic DNA for gene therapies and DNA vaccines and providing solutions for effective and safe delivery of these DNA based products to patients. The Company has been divested from 4basebio AG , a German company listed on the Prime Standard segment of the Frankfurt Stock Exchange . No capital to be raised on Admission. Anticipated market capitalisation on AIM Admission: GBP14.53m. Due 17 Feb
Baskerville Capital plc (to be renamed Oberon Investments Group Plc) is a boutique financial institution providing a personalised wealth management service for retail and professional clients, as well as a corporate broking arm for small and mid-cap companies. Oberon’s strategy is to progress through the organic growth of assets under administration in its wealth management division and by the acquisition of complementary businesses in the financial services sector and by creating a trusted brand for the provision of advisory and fundraising services for companies in the small and mid-cap sectors. Expected admission date 9 February 2021.
Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise GBP5m by way of private placement of new Common Shares to advance the United Downs copper-tin project. The Company expects that Admission will become effective in February 2021. The Company’s Common Shares will continue to be listed and trade on the TSX-V in Canada.
DXS International* 7.25p GBP3.5m (AQUIS:DXSP)
Update on its ExpertCare hypertension solution pilot programme. There are currently 12 pilots live at various stages, with a total of 30 pilots planned, each with a minimum of at least 30 patients in each pilot. Initial results from four completed pilots in GP practices are encouraging:
Patient non-compliance with prescribed treatment was reduced from 41% to 21%;
Prescribing regimen particularly in patients with comorbidities improved in 15% of cases;
The system is seen as intuitive and easy to use;
Where the system recommended changes to clinician decisions, these were on closer inspection fully accepted by the relevant clinicians as correct and indeed needing change; and
GPs using the ExpertCare system considered that it could empower nurses and pharmacists to conduct the majority of hypertension consultations with minimal GP input.
Additional pilots are still in progress and DXS is working closely with NHS stakeholders to complete a global best of breed hypertension solution that will deliver significant Return on Investment to healthcare providers, help plug the GP shortage gap and improve patient outcomes by increasing compliance and averting unnecessary complications. DXS has also started planning for pilots in carefully selected markets outside the UK.
Amryt Pharma 209p GBP374m (LON:AMYT)
The Global, commercial-stage biopharmaceutical company dedicated to acquiring, developing and commercializing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases, today announces the signing of multi-regional distribution agreements with Medison Pharma to distribute Juxtapid(R) (lomitapide) in Canada and Lojuxta(R) (lomitapide) and Myalept(R) (metreleptin) in Israel.
Kropz 4.25p GBP23.74m (LON:KRPZ)
Update for its Hinda phosphate project, located in the Republic of the Congo.
Kropz has appointed Hatch Africa Ltd, a leading global engineering and construction firm, to complete the updated feasibility study (Updated FS) on Hinda. This follows the conclusion of the focussed logistics study, completed by Hatch in September 2020. The Updated FS will target a phased approach in line with the terms of the mining investment agreement, with initial production of one million tonnes per annum (“Mtpa”) of phosphate rock being exported from the existing port facility at Pointe-Noire, which is 50 km from Hinda. A second phase production ramp-up of two Mtpa will also be evaluated with export from a new port site, located north of Pointe-Noire.
The RoC is experiencing its second wave of the COVID-19 pandemic. However, this is not currently impacting on the work schedule being undertaken by Hatch. The Updated FS will be concluded by the end of September 2021
EPE Special Opportunities 271p GBP87.12m (LON:ESO)
Update on the Company’s performance for the year ended 31 January 2021. The unaudited estimate of the Company’s Net Asset Value (NAV) as at 31 January 2021 is 437.63 pence per share, an increase of 38.0 per cent on the NAV per share of 317.18 pence as at 31 January 2020. The unaudited estimate has been prepared using the Company’s historic valuation methodology and accounting principles.
. The Company’s share price as at 31 January 2021 was 271.00 pence, representing an increase of 36.2 per cent. on the share price of 199.00 pence as at 31 January 2020.
. The Company has overall performed well in the face of significant disruption caused by the spread of COVID-19 and the resultant economic headwinds. The Board, Investment Advisor and the management of the portfolio companies have continued to prioritise the protection and wellbeing of colleagues, whilst safeguarding the financial position of the Company and its investments. Worryingly however, lockdowns have continued into 2021 and the cost of the pandemic to livelihoods and the wider economy remains to be counted.
. The disruption to the economy could lead to businesses needing further financial support over the coming 12-18 months. This dynamic is both an investment opportunity and a portfolio risk for the Company. The Board continues to examine new investment opportunities as identified by the Investment Advisor.
Conroy Gold & Natural Resources 36p GBP11.64m (LON:CGNR)
The gold exploration and development company focused on Ireland and Finland announced further gold discoveries on its Glenish gold licence: a large new gold-in-soil anomaly, and a new gold mineralised outcrop indicating an extension of the Glenish Gold target.
The newly discovered gold-in-soil anomaly lies 2km northeast of the Glenish gold target and is located at Corlongford on the border between the Glenish gold licence and the Clontibret gold licence. The anomaly covers an area circa 500 metres by 400 metres and is bisected by the Orlock Bridge Fault Zone which is a major control on gold mineralisation in the Longford-Down Massif.
Rock chip sampling in the Glenish Licence area has discovered gold in bedrock in two areas, one within the Glenish gold target and adjacent to a previous gold mineralised zone announced (as announced by the Company on 30th April 2020) with values up to 0.2 g/t gold, the other 200 metres to the East of the Glenish gold target suggesting that the Glenish gold target may extend further than previously indicated by gold- in-soil sampling.
Duke Royalty 27.5p GBP70.92m (LON:DUKE)
The provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, updated on its third financial quarter ended 31 December 2020 and provided guidance on trading for its fourth financial quarter ending 31 March 2021 .
. Cash revenue for Q3 FY21, being cash distributions from Duke’s Royalty Partners and cash gains from sales of equity assets, totalled GBP4.2m which represents a record quarter of cash revenue generation for Duke. Within the GBP4.2m of quarterly cash revenue, GBP1.7m related to the receipt of the redemption premium generated from the exit of Welltel, which occurred in December 2020. Once this positive effect is stripped out, like for like cash revenue for Q3 FY21 stood at GBP2.5m. This is in line with management’s expectations and represents an increase from the GBP2.4m reported in Q2 FY21 and GBP2.0m in Q1 FY21.
. An IRR of 27% was generated from Duke’s investment in Welltel. This was the Company’s largest investment and represented the second exit of a royalty partner, further validating the Duke investment model.
. Based on current trading, Duke expects cash revenue for Q4 FY21 to be GBP2.5m, despite Welltel contributing no cash revenue in the quarter. Prior to exit, Welltel was delivering quarterly cash revenue of GBP450,000, highlighting the ongoing improvement in the cash generation of the existing portfolio.
. Duke’s pipeline remains strong and management is confident of being able to announce additional follow-on as well as new deployments in the near future, in line with market expectations .
The Panoply Holdings 180p GBP124.6m (LON:TPX)
The technology-enabled services group focused on digital transformation, announces it has recently won two separate contracts in partnership with Mastek, a global IT player, worth more than GBP7m over the life of the contracts .
The Contracts, which run for two years and have been awarded by the NHS Business Services Authority, comprise a GBP6m framework agreement to provide capabilities to support the organisation’s digital transformation agenda and a GBP1.2m contract to be its overseas digital health delivery partner.
Update on Foundry4
Difrent will be integrated into Foundry4 with effect from 1 April 2021 at which time Rachel Murphy, current CEO of Difrent, will become CEO of Foundry4. Rachel brings a wealth of delivery experience from across the public sector and the healthcare market, providing the foundations for further expansion into this target market for the Group.
Christie Group 95.5p GBP25.3m (LON:CTG)
Post close trading update from the provider of Professional & Financial Services and Stock & Inventory Systems & Services to the hospitality, leisure, healthcare, medical, childcare & education and retail sectors.
Following a period of stronger trading and increased revenue it will (subject to forthcoming audit) have generated an operating profit, after restructuring costs, for the second half of the year ended 31st December 2020. After successful reorganisation of two of its trading businesses, the Group has entered 2021 with the benefit of lower operating costs.
The Group’s licensed stocktaking business, Venners, is currently supressed due to the governments’ closure of the hospitality sector. Staff are on furlough pending the reopening of hospitality. The Agency & Advisory practice, Christie & Co, is currently experiencing an increase in demand from insolvency practitioners whilst business buyer demand remains very strong.
In view of the current lockdowns in the UK & Europe, trading for 2021 expected to be weighted to the second half. The closing cash position is ahead of expectation Company remains well resourced.
Good Energy Group 183.5p GBP30.54m (LON:GOOD)
The 100% renewable electricity supplier and energy services provider today announces that Juliet Davenport OBE, Chief Executive Officer of the Company, has decided to transition from her role as CEO and take up a Non – Executive Director position with the Company as well as its subsidiary Zap-Map. Juliet will remain CEO of the company while the formal process to find the new CEO is undertaken.
This transition is part of the continuing evolution of Good Energy from its roots as a simple green energy provider to a newer world green energy services and ‘mobility as a service’ provider. With Good Energy now well established as a leading renewable energy provider and following a period of significant internal investment and progress, Juliet has decided that now is the appropriate time to bring in a new CEO to take the business forward.
Marlowe 578p GBP349m (LON:MRL)
The specialist in business critical services and software which assure safety and regulatory compliance, announces that it has acquired Hadrian Technology Limited for an expected enterprise value of GBP3.8 million. HTL, founded in 1999, is a leading provider of CCTV and loss prevention technology solutions across the UK and Ireland. Hadrian implements CCTV solutions, operating software, digital cloud-based storage and ongoing maintenance primarily to clients in the supermarket sector across the UK.
For the year to 31 July 2019, HTL generated revenues of GBP4.0 million and had net assets of GBP3.3 million with profit margins expected to be in line with the Group’s fire safety & security activities. The total enterprise value will comprise an upfront cash consideration of GBP2.0 million and a contingent consideration which is expected to be approximately GBP1.8 million over four years dependent on the achievement of profit targets. The acquisition will be funded from Marlowe’s existing cash resources.
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