Small Cap Wrap – Surface Transforms, Sabien Technology, K3 Business Tech and more…

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Small Cap Feast – 05 March 2021
 

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What’s Cooking In The IPO Kitchen?
 

Market news

With London still licking its wounds from being knocked off its perch by Amsterdam as Europe’s top share trading hub, Lord Hill’s report into reforming the UK Listing rules is widely billed to try and help get London back on top as a listing destination.  The key recommendations consider:

Allowing companies to operate “dual-class” share structures on the premium list whereby company founders keep control of the company on listing with clauses such as anti-takeover. 

The second recommendation included reducing the free float requirement from 25% to 15%. 

Deliveroo is the latest IPO candidate to opt for a dual class share structure in London the day after the Chancellor backed Lord Hill’s recommendations.  Investor concerns on dual class structures that they could damage shareholder rights as they are not all treated equally has been a frequent rebuttal to the proposals.

Proposed move to AIM from the main market (standard)  by Emmerson (EML.L)  to provide Emmerson with access to a market and environment which is more suited, in the Board’s view, to the Company’s current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. Subject to EGM on 21st March. 

Rogue Baron plc have announced its application for admission to the AQSE growth  market.  Rogue Baron owns five subsidiaries, namely: Shinju Spirits, Inc., Shinju Whiskey LLC, Mazeray Corporation, STI Signature Spirits Group LLC and Legacy Retail Group LLC.  The Company’s goal is to build each of its brands that makes them a buyout target.  Deal size TBC an expected admission date 12th March 2021.

Global review platform, Trustpilot has announced its intention to float on the premium list of the LSE.  Trustpilot provides an open platform, which creates a place where businesses and consumers can gain actionable insights and collaborate. Consumers are able to share feedback, at any time, about any business with a website and review feedback left by other consumers.  Total revenues were US$64.3m, US$81.9m and US$102.0m for the years ended 31 December 2018, 2019 and 2020, respectively.  The Offer would comprise new Shares to be issued by the Company (raising gross proceeds of approximately US$50m to support Trustpilot’s growth plans and repay indebtedness) and an offer of existing Shares to be sold by certain existing shareholders, directors and employees.  Timing TBC.

In The Style, the e-commerce womenswear fashion brand with an influencer collaboration model, announces their intention to float on AIM.  In The Style is a pure-play e-commerce fashion brand with a l customer base of women predominantly aged between 16 and 35. Founded in 2013, the group has delivered £35.4m net sales and £3.6m Adjusted EBITDA in the nine months to 31 December 2020, with sales up 159% from £13.7m for the nine months to 31 December 2019.  Admission is expected to take place on or around 17 March 2021.  Deal size TBC.

Media reports video game firm, Catalis is mulling a London IPO, just over a year after being bought by a private equity firm.  Catalis’s accounts are reportedly expected to show revenues increasing to £60m in 2020, up from £43m, with adjusted earnings of £15m.  Deal details and timing TBC.

tinyBuild— a leading video games publisher and developer with global operations. tinyBuild’s strategic focus is in creating long-lasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC.  Due mid-March.

AMTE Power,  a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7m by way of a placing of new ordinary shares in the capital of the Company. Timing TBC.

Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world’s largest market for brands and retailers, intends to IPO on  the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021.

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 £300m 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 2021.

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 £400m. 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.

Team PLC announced their plans for an AIM IPO.  Team owns Theta Enhanced Asset Management Ltd, trading as Team Asset Management. This is a Jersey-based active fund manager providing discretionary and advisory portfolio management services to private clients, trusts and charities. Assets under management were GBP291m in November, up from GBP140m in December 2019 .   The Company is seeking to raise  no less than £5m.  The Placing will be priced on a pre-money valuation for the Company of £7m. Targeting March Admission.

Fix Price announces its intention to float on the Main Market of the London Stock Exchange.  Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company.

Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA.  Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT’s investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.

According to media reports, Deliveroo is expecting to release its IPO plans on 8th March.  The company, said to be targeting a valuation of up to $10 billion, intends to opt for a dual-class share structure for three years after the listing, meaning Deliveroo’s founders could retain extra voting rights for that period.

 

Breakfast Buffet

Xeros Technologies 248p £49.45m (LON:XSG)

Conditional placing of £8m at 243p by the developer and licensor of technologies which reduce the environmental impact and cost of clothing and fabrics .

Net proceeds of the Fundraise will be used to provide the funding necessary to accelerate commercialisation of the Company’s innovative XFiltra technology for the domestic washing machine market over the next two years with revenue anticipated in 2023;· The net proceeds will also provide funding to continue the execution of the Company’s current portfolio of contracts and development agreements and to enter into new agreements in additional geographies as well as providing contingency funding for any further potential COVID-19 related delays; The current plans with the Company’s licensees and partners mean the directors expect the Company can deliver a cash breakeven position for Xeros by the end of 2022.

 

Touchstone Exp 152.5p £319m (LON:TXP)

Summary of its 2020 year-end reserves and operational update. · Increased 3P net reserves by 236% to 100,150 Mboe, increased 2P net reserves by 194% to 64,947 Mboe and increased 1P net reserves by 189% to 34,238 Mboe from the prior year.

In comparison to 2019, 10% discounted net present value of future net revenues (NPV10) on a before tax 3P basis increased by 90% to $1,002.8m and after tax 3P NPV10 increased by 108% to $419.4m.

Tested two identified pay zones in the Chinook-1 well, with both zones encountering potential upside in the form of light sweet crude oil. One pay zone is currently being configured for an extended production test.

Equipment has arrived in Trinidad to enable testing of the main gas bearing zones in the Cascadura Deep-1 well, where significant hydrocarbon accumulations were reported in December based on drilling and wireline logging data.

Testing of the potential gas bearing sands in the Chinook-1 well will commence following the extended crude oil test.

 

Surface Transforms 69p £134.6m (LON:SCE)

The manufacturers of carbon fibre reinforced ceramic automotive brake discs, announced the appointment of two new independent non-executive directors with immediate effect. 

Matthew Taylor joins the Board as non-executive director after retiring from his role as CEO of Bekaert SA in 2020. Bekaert SA is a EUR5billion revenue, 30,000 employee global steel wire business headquartered in Belgium with 45% of its business in automotive. Prior to this role, Matthew was CEO of Edwards Vacuum, CEO of JC Bamford, and Global MD of Land Rover following his early career in sales and marketing roles with Ford after a short spell in the Royal Navy.

Julia Woodhouse also joins the Board as non-executive director. Julia spent her executive career with Ford Motor Company where her roles included Director, Global Power Train Purchasing, based in USA and Director, Global Chassis Purchasing, based in Germany.

 

Sabien Technology 0.1175p £5.14m (LON:SNT)

Appointment of Edward Sutcliffe as Chief Financial Officer and an Executive Director of the Company, effective immediately. 

Edward has worked as Sabien’s Interim Finance Director and Company Secretary since June 2017.  Edward is a fellow of the Institute of Chartered Accountants and prior to joining a private equity fund focused on SMEs in 2014 spent 12 years working in a range of corporate finance, restructuring and accounting roles for professional services firms. Edward spent 8 years in New Zealand with PwC and BDO where he worked on a number of high profile IPOs and receiverships, as well as undertaking secondment projects for large corporates.

Sabien Technology Group is a company focussed on building a portfolio of solutions, in the heating, cooling and transportation sectors, that deliver immediate reductions in CO2 emissions coupled with a short to medium term return on investment.

 

K3 Business Tech 176.5p £75.8m (LON:KBT)

K3, which provides mission critical business software and cloud solutions, announces that having managed the recent successful disposal of Starcom Technologies Limited, which has substantially strengthened the Company’s financial position, and with the Company moving into a new phase of development, Adalsteinn Valdimarsson is stepping down as Chief Executive Officer and leaving K3.  

Chairman Tom Crawford assumes the role of interim Chief Executive Officer until the recruitment of a successor completes, a process that is already under way. These Board changes take immediate effect.

 

Phoenix Copper 36p £22.9m (LON:PXC)

Placing and Subscription to raise £16.45m at 35p, and Open Offer to raise up to £1.95m  from the North American focused base and precious metals exploration and development company.  The Directors intend to use the net proceeds of the Fundraising for:

Ongoing development of the Empire Mine open pit ‘starter’ project to produce copper, zinc, gold and silver, including mine optimisation, pre-construction and process engineering, metallurgical test work, and the preparation of the Plan of Operations and related reclamation plan; Ongoing exploration of the Red Star high grade silver-lead deposit, and the Navarre Creek gold project, with magnetic surveys and geochemical work planned for both properties, as well as drilling programmes on both properties as a prelude to further resource calculations; Initial drilling into the deeper historically mined underground sulphide deposit below the Empire Mine open pit; and additional working capital for the Group as a whole, to include the repayment of the recently announced £2m debt facility.

 

Origin Enterprises 3.5p £439.6m (LON:OGN)

The international Agri-Services Group, announced the acquisition of Greentech Limited the UK’s leading manufacturer and distributor of landscaping, forestry and grounds maintenance equipment. Green-tech is expected to enhance the offering of Origin’s Amenity businesses and offers potential in the area of environmental land management and bio-diversity enhancement for the Group’s agri-focused businesses.  No financials were disclosed.

 

SDX Energy 17.25p £35.4m (LON:SDX)

The MENA-focused oil and gas company has received final approval from the Egyptian authorities to extend the Production Services Agreements governing its producing Meseda and Rabul oil fields in its West Gharib concession in Egypt until 9 November 2031. 

 

Trans Siberian Gold 91.5p £79.6m (LON:TSG)

The low cost, high grade gold producer in Russia, announces that following an accident announced on 6 January 2021, the Company has been granted full permitting approvals to resume mining operations at Vein 25 in the East Zone of the Asacha Gold Mine with immediate effect and updated on trading.

Group has traded profitably during January and February 2021

Gold doré production of 5,122 oz. from average gold grade of 5.1 g/t in January and February 2021

Average realised gold price of $1,819/oz for January and February 2021

Positive Net Cash  position   of $2.7m at 1 March 2021

Unsold finished metal in stock is 3,242 oz. gold and 7,869 oz. silver

 

RBG Holdings 99p £84.74m (LON:RBGP)

The professional services group announced a further update on the progress at Convex Capital Limited, the Group’s specialist sell-side corporate finance boutique.

Convex Capital has continued to convert its strong pipeline into completed transactions. Further to the update on 8 February 2021, Convex Capital has concluded another deal, earning a fee of £1.5m. This brings the total number of completed transactions to four since 1 January 2021, resulting in a total fee income year to date of £2.6m. 

This represents a notable improvement in successful conversion, having completed only two deals, which generated total revenue of £1.5m in 2020 because of the disruption caused by the pandemic. After working to pivot its sector focus, which resulted in a successful rebuild of its transaction pipeline over the last six months, Convex Capital is currently working on a further eight transactions which have the potential to complete in the short to medium term. The deal pipeline continues to be strong with a number of other deals across various sectors at earlier stages.

 

Head Chef:

Derren Nathan
0203 764 2344
[email protected]

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