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Small Cap Feast – Cordiant Digital Infrastructure; Sareum Holdings; Pelatro and more…

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Feb 2021


@HybridanLLP




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Dish of the day


Kanabo Group (LON:KNB) 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 . Kanabo Research Limited has the only medically-approved vaporisation device, the VapePod(R), which provides metered dosages of its proprietary cannabis-based oil formulations


Cornish Metals (TSX-V:CUSN) (AIM:CUSN) has listed 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’s Common Shares will continue to be listed and trade on the TSX-V in Canada. Raising GBP8.2m. GBP18.7m mkt cap. The proceeds of the Fundraising will be used to conduct a drill programme at the United Downs copper-tin project (“United Downs”) to determine the resource potential of a 1,000 metre strike section of the target area, to conduct initial field work (soil sampling and geophysics and possible drill testing) on other high priority exploration targets within trucking distance of the South Crofty Mine in Cornwall, and for general working capital purposes.


Cordiant Digital Infrastructure (LON:CORD) has admitted its shares on the Specialist Fund Segment of the Main Market of the London Stock Exchange . Raised GBP370m. Cordiant invests in global infrastructure and real assets, running infrastructure private equity and infrastructure private credit strategies through limited partnership funds and managed accounts.




Off the menu


No Leavers Today






What’s cooking in the IPO kitchen?


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 GBP7 million 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.


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.”


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 2021.


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. Expected 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 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.


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




Banquet Buffet


Sareum Holdings* 2.025p GBP66.17m (AIM:SAR)


The specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, notes the announcement from the UK Government Department of Health and Social Care on 13 February 2021, regarding the launch of its AGILE clinical development platform to fund Phase 1 trials and fast-track the development of potentially ground-breaking Covid-19 treatments. The Company views this new platform as a welcome source of funding to support the early clinical development of promising new candidates to address the breadth of symptoms that affect patients with Covid-19.


As previously announced, Sareum is currently investigating SDC-1801, its selective, small molecule TYK2/JAK1 kinase inhibitor, in a preclinical Covid-19 research programme. The programme, which commenced in December 2020 with grant funding from the UK government, is expected to take approximately six months to complete and aims to investigate the effects of SDC-1801 on cytokine signalling after human cells are infected with SARS-CoV-2, to confirm whether an over-active inflammatory response (known as a ‘cytokine storm’) via the Interferon Type 1 pathway can be blocked in this disease. The Company is also investigating whether treatment with SDC-1801 in disease models can re-establish protection against bacterial pneumonia following SARS-CoV-2 infection.


The Company has previously stated it would require additional funding to advance SDC-1801 into clinical trials depending both on positive results from its ongoing Covid-19 research programme and on the successful outcome of the Company’s broader preclinical development programme with SDC-1801. The Company believes that, should the current preclinical work programme be successful and indicate that SDC-1801 is a potential treatment for severe-phase Covid-19, the Company may be eligible for an AGILE grant.




Pan African Resources 21.95p GBP423m (AIM:PAF)


Interim Results for six months to 31 Dec 2020. Group gold production increased by 5.9% to 98,386oz (2019: 92,941oz). Robust operational performance from Barberton Mines, with the complex achieving production output of 52,354oz (2019: 47,356oz). On track to deliver on full year production guidance of approximately 190,000oz of gold. The Group continues to maintain stringent COVID-19 pandemic mitigation policies and protocols to protect its employees and operations


Commendable safety performance maintained, with improvements in reportable accident rates, with the exception of Barberton where a fatal accident occurred in July 2020 as previously reported. Net cash generated by operating activities increased by 178.2% to US$28.1 million (2019: US$10.1 million). Reduced net debt by 47.3%, implying a net debt to net adjusted EBITDA ratio of 0.5. Profit after taxation and headline earnings of US$40.8 million (2019: US$21.9 million profit after taxation and US$21.7 million headline earnings)


Adjusted EBITDA increased by 72.9% to US$76.4 million (2019: US$44.2 million). Record rand dividend payment in December 2020 of US$17.8 million (2019: US$2.9 million) to shareholders. Agreement for evaluation of proposed Mintails transaction extended to 31 January 2022.


ESG projects, including the 9,975MW solar photovoltaic plant at Evander Mines and large- scale agriculture projects at Barberton Mines, are on track for commissioning in the third quarter of calendar 2021. The Group remains vigilant in monitoring and implementing operating procedures for the prevention and mitigation of COVID-19 among its employees.




Pelatro 37.5p GBP13.9m (AIM:PTRO)


The telecom Customer Engagement Hub software specialist, announced that final implementation of its flagship product, mViva Contextual Campaign Management Solution has been completed in the network of its largest customer. Pelatro had won this 5-year Managed Services contract at the end of 2019 and, due to the size and complexity of the customer’s network, the implementation has been in progress throughout 2020 with various geographical areas going live in stages. The network has over 400 million subscribers and this success achieved at such scale establishes the unique architecture and advanced technologies employed by Pelatro in this product. Pelatro’s patented technology powers the engines that are able to consume, analyse and process billions of data records in real time.




Nexus Infrastructure 153p GBP69.25m (AIM:NEXS)


AGM Statement from the provider of essential infrastructure services, utilities connections and smart energy infrastructure. “Whilst the pandemic continues to cause general economic uncertainty, the fundamental market growth drivers for our business remain positive and are underpinned by Government stimulus for housing, renewable energy and electric vehicle charging. I am pleased to report that trading conditions within TriConnex and eSmart continue to be positive with both businesses carrying significant momentum. TriConnex and eSmart have performed ahead of our base case scenario as set out at the time of the Group’s placing in June last year, with significant growth in new business in-line with our growth strategy for these two divisions.


The pandemic and resulting market uncertainty has however continued to provide challenges for Tamdown. Despite on-site activity and new business wins picking up since the year-end, trading is more in-line with the downside scenario as set out at the time of last year’s placing. We are confident of a recovery in Tamdown’s revenues and margins as industry activity returns to more normalised levels. With a strong balance sheet and order book of GBP279m, Nexus remains on-track to implement its recovery and growth strategy with a return to pre-Covid levels of activity in FY22.”




Tertiary Minerals 0.505p GBP5.59m (AIM:TYM)


Tertiary has now received results from soil sampling and a detailed magnetic survey at its Paymaster Polymetallic Project in Nevada, USA.


. Infill soil sampling completed over East Slope Prospect – Zinc-silver soil anomalies defined over 450m, open to the east.


. Maximum values of 34.9 ppm silver (1.02 ounces per ton) and 5.65% zinc (single sample) in soil samples (close to high grade outcropping mineralisation).


. Magnetic Vector Inversion modelling defines magnetic bodies associated with East Slope and Valley Prospects and additional targets for exploration.


. Field mapping and trenching proposed for spring/summer 2021.




Botswana Diamonds 0.925p GBP7.23m (AIM:BOD)


The Diamond explorer has today entered into a cooperation agreement to fund exploration of its prospecting licence assets in Botswana with Diamexstrat Botswana (DESB), which in turn has an alliance agreement with Burgundy Diamond Mines Limited (ASX: BDM). BOD’s prospecting assets comprise the recently acquired Sekaka Diamonds Exploration Pty Ltd (Sekaka) database and Prospecting Licenses , as well as the Prospecting Licences held by BOD’s subsidiary, Sunland Minerals Pty Ltd.


– DESB (and its partner, Burgundy) can earn up to a 70% interest in BOD’s Botswana Sunland Minerals and Sekaka’s Prospecting Licences


– BOD can earn a 15% interest in Prospecting Licences held by DESB (and partners) on the first US$1.5m spent on exploration by DESB where BOD’s database assists in the discovery of a primary kimberlite


– On 3rd party Prospecting Licences where targets are identified in BOD’s database, a joint earn-in will be negotiated at the time


– For new Botswana Prospecting Licences, DESB (and its partner, Burgundy) can earn up to 70%




Calnex Solutions 126p GBP110m (LON:CLX)


The established provider of test and measurement solutions for the global telecommunications sector, today provides an update on trading for the year ending 31 March 2021 .


The strong levels of customer spend experienced in the first half of the Group’s financial year continued into the second half of FY21, with no deterioration in operational performance noted from any macro-economic factors, including the ongoing COVID-19 pandemic. The Board believes the COVID-19 pandemic may have influenced certain customers’ spending patterns, resulting in some revenues being brought forward into FY21.


As a result of the continued strong performance in the second half of FY21, the Board anticipates revenues for FY21 will be ahead of market expectations. In addition, as a result of lower travel and event costs due to COVID-19 restrictions, higher margins are expected to be achieved in FY21 than would have been anticipated, which will result in the Company’s profitability also being ahead of market expectations in FY21.




Fusion Antibodies 135p GBP34.34m (AIM:FAB)


The specialists in pre-clinical antibody discovery, engineering and supply for both therapeutic drug and diagnostic applications, announce the appointment of Dr Richard Jones as Chief Executive Officer, replacing Dr Paul Kerr who stands down from the Board with immediate effect in order to pursue other opportunities. Paul will become a consultant to the Company so that he can continue to support the Company going forward.


Richard Jones is an accomplished life sciences executive with 25 years’ experience in the pharmaceutical industry both in big pharma and biotech companies as well as running a contract development and manufacturing organisation (“CDMO”). He joins Fusion from BrYet Limited, a biotech company focused on the discovery and development of transtherapeutics nanotechnology for the treatment of metastatic liver and lung cancers. As CEO of BrYet, Richard led the company’s transition from research group to a start-up biotechnology company. Previously, Richard was Senior Vice-President, Head of Europe for NASDAQ listed Akcea Therapeutics, a US biotech company focused on rare diseases. During his time in charge of the European operations, Richard successfully built a business with over 100 staff across 16 countries, generating revenues of c. $25m.




Omega Diagnostics 83.5p GBP150m (AIM:ODX)


The medical diagnostics company focused on CD4, infectious diseases and food intolerance, notes the press release issued today by the UK Rapid Test Consortium, of which Omega is a partner, welcoming a pre-print publication, funded by Public Health England (PHE), reviewing performance data on rapid antibody tests including the AbC-19TM Rapid Test.


The study, performed by scientists at PHE, and the Universities of Bristol, Warwick and Cambridge, examined the performance of four lateral flow rapid antibody tests using the same cohort of sample, and shows that the AbC-19TM is highly accurate when tested on samples from individuals previously positive for the virus by PCR and from samples collected pre-pandemic. All devices tested had accuracy of above 92% with the AbC-19 TM Rapid Test showing the highest accuracy at 97.3%. The study remains subject to peer review.




Duke Royalty 29.75p GBP76.7m (AIM:DUKE)


Duke has further diversified its revenue base by entering into a GBP6.2 million royalty financing agreement with Meteor HoldCo Limited, which undertakes business as Fabrikat Limited . Formed in 1985 and based in Sutton-in-Ashfield, UK, Fabrikat is a fabricator of steel products supplying the UK street lighting and guardrail markets.


. Initial cash yield of approximately 14% per annum via monthly payments, which commence immediately . 30-year secured financing, with distributions to be adjusted annually to reflect Fabrikat’s consolidated revenue growth, on typical Duke terms


. Fabrikat has a long history of steady turnover and profitability, providing street lighting columns, guardrails and more bespoke products to local councils around the UK via contractors and Original Equipment Manufacturers


. Duke’s investment will facilitate a management buyout of two shareholders who, in recent years, have handed over the day to day running of the business to the current management team which has a combined tenure in the business of more than 60 years and lead all aspects of Fabrikat’s operations


. As part of the recapitalisation, Duke will receive a 30% equity stake in the business




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