Small Cap Wrap – Redcentric, iEnergizer, Restore and more…

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12 Nov 2020

@HybridanLLP

*A corporate client of Hybridan LLP

 

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Sumner Group Mining has left the Aquis Stock Exchange.

What’s cooking in the IPO kitchen?

Bytes Technology Group one of the UK’s leading software, security and cloud services specialists, announces that the Company intends to publish a Registration Document and is considering proceeding with an initial public offering (Main Mkt Prem).  FY20 gross profit of £79.2m (+24.5% against FY19) and adjusted operating profit of £31.7m (+53.9% against FY19). Highly cash generative with FY20 cash conversion of 125.9% (FY19 cash conversion 139.7%). Bytes due on or around 17 December 2020.

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 375m 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.

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 ).    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. 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.   Targeted for Q4 2020.

Press reports emerged late last week that cybersecurity firm Darktrace is targeting a float next year with a US$5bn valuation. The company uses artificial intelligence technology to spot cyber threats for businesses. Some of its clients include BT Group, William Hill and online shopping giant Ocado. Its investors also include KKR & Co, Vitruvian Partners and Summit Partners. Targeted for  2021.

Banquet Buffet

MediaZest*  0.04p  £0.56m (LON:MDZ)

The creative audio-visual company updated on current trading and the impact of the second UK “lockdown” as a result of the Covid-19 Pandemic.

Post the initial UK “lockdown”, trading has continued to be encouraging. Although client work continues at a slower pace than in the run up to March 2020, new projects are being pitched for on a regular basis, and several mandates have been won in recent weeks. Ongoing contractual income remains robust and the renewal rate of such recurring revenue streams has been strong.

The differing terms of the second “lockdown” mean that many projects continue to be delivered, with additional safety and social distancing measures. In light of this the Board does not expect the impact of this second lockdown to be as negative as the first, although it will may have an adverse effect on trading. The Group will also continue to use Government support schemes as appropriate where work cannot continue, and cost reduction measures remain in place where possible to mitigate the impact of such restrictions.

 

TMT Investments*  4.45p  £130m (LON:TMT)

The venture capital company investing in high-growth technology companies, is pleased to announce that its portfolio company Pipedrive, Inc., a leading sales CRM solution ( www.pipedrive.com ), has today announced that it signed a definitive conditional agreement regarding a majority investment from Vista Equity Partners, a leading US investment firm that focuses exclusively on enterprise software, data and technology-enabled businesses .

As part of the Transaction, TMT has agreed to dispose of its entire holding in Pipedrive to Vista for a cash consideration of approximately US$41 million.  

The Disposal represents a substantial valuation uplift of approximately US$29.1 million (or 245%) in the value of TMT’s investment in Pipedrive prior to the Disposal, being the sum of the previous reported amount as of 30 June 2020 plus the value of Pipedrive shares acquired by TMT in July 2020.

 

Sareum Holdings* 1.375p  £44.9m (LON:SAR)

Amended terms  to the 2016 licensing agreement between Sierra Oncology, Inc. and CRT Pioneer Fund LP  for the Chk1 inhibitor SRA737 have been agreed between the two parties. Sierra and CPF have agreed to a decrease in the additional milestone payments of up to an aggregate of $290.0 million that may be payable to CPF upon the achievement of certain developmental, regulatory and commercial milestones, including a milestone payment of $2.0 million upon the dosing of the first patient of the first trial of SRA737 following the Amendment.

In the event that the milestone payment for a milestone event, as defined in the CRT License Agreement, becomes due, but no milestone payment for an earlier milestone event has been paid, then the milestone payment attached to the earlier milestone event will automatically become due and payable contemporaneously with the payment for the later milestone event. Sierra will accrue for any future milestones payments once they are considered probable of occurring.

In addition, Sierra remains required to pay CPF, on a product-by-product and country-by-country basis, tiered high single-digit to low double-digit royalties on the net sales of any product successfully developed. Sareum continues to be eligible for 27.5% of the economics of the CRT License Agreement, as amended .

 

Volex  256.5p  £390.5m (LON:VLX)

The global supplier of integrated manufacturing services and power products, has signed a share purchase agreement for the proposed acquisition of the entire issued share capital of De-Ka Elektroteknik Sanayi ve Ticaret Anonim Şirketi, for a total consideration of up to €61.8 million, on a debt-free basis .

 DEKA is a leading power cord manufacturer for the European white goods market

Headquartered in Kocaeli, Turkey, with three production facilities and approximately 450 employees, it is strategically located in a low-cost region close to Europe Like Volex, DEKA has shown a resilient performance through the period of the Covid-19 pandemic and reported unaudited sales of €33 million for the nine months ended 30 September 2020

DEKA has best-in-class automation, full vertical integration and a strong management team who are expected to remain with the business

DEKA offers exciting organic growth potential, providing Volex with increased market share in attractive end market segments

 

Ideagen 227p  £515m (LON:IDEA)

The supplier of regulatory and compliance software, is pleased to provide an update on trading for the six months ended 31st October 2020 .

The Board is pleased to report that trading for the first half of the financial year has been ahead of the same period last year and comfortably in line with the Board’s expectations . These results underpin the Board’s confidence in the Group’s prospects for the second half of the financial year and are based upon the continuing execution of a strategy to grow revenue both organically and through acquisitions , maintaining high EBITDA margins through disciplined cost control , generating strong cashflow and increasing annual recurring revenue (ARR) as a percentage of total revenue.

The Board considers ARR as the Group’s primary growth metric and the driver for long term value.  ARR recognised during the first half is expected to be £24.4m (H1 2019: £20.3m), representing 83% of total revenues, up from 74% in the comparative prior period. The ARR book (being contracted revenue to be recognised over the coming 12 months) has increased by 13% during the first six months to approximately £54. 8m (April 2020: £48. 7m ), arising from both strong organic growth of approximately 7% (14% on an annualised basis) and 6% of acquired ARR from the acquisition of Qualsys in August 2020 . 

 

Redcentric  122.5p  £190.6m (LON:RCN)

Redcentric  today announced that the Board has decided to terminate the formal sale process with immediate effect. Redcentric is a customer focused end to end managed service provider delivering innovative technology to improve business productivity and efficiency.

 

The Company is also today announcing its half year results to 30 September 2020, which show a 7% increase in revenue to £46.2m and a 19% increase in Adjusted EBITDA to £12.3m. Since 31 March 2020, net debt has reduced by £17.5m to £17.0m, reflecting continuing strong adjusted operating cash flow conversion of 105%. 

 

iEnergizer  275p  £523m (LON:IBPO)

iEnergizer, the technology services and media solutions leader for the digital age, reports another record set of interim results for the six months ended September 30, 2020. Following the increase in both earnings and interim dividend the Board looks forward to the remainder of the year with confidence.

 Financial Highlights: Enhanced profitability and margin improvements despite temporary revenue impact of the COVID-19 pandemic.

· EBITDA   up by $1.6m to $30.7m (H1 2020: $29.1m) · Increased EBITDA margin at 34.1% (H1 2020: 30.2%) · Group Revenue down 6.5% to $90.2m (H1 2020: $96.5m), reflecting reduced business from clients impacted by government lockdown measures

· Net Cash of $5.6m (31 March 2020: $1.6m). · Proposing interim dividend of 5.72p per ordinary share ($14.36m) (H1 2020: 5.2p)

 

Restore  345p  £433m (LON:RST)

The UK market leading document management, commercial relocation and IT recycling business provide a trading update for the ten month period ended 31 October 2020.

 Further to the third quarter trading update announced on 1 October 2020, the Group provides the following update on trading activity through to the end of October:  –  Overall activity levels in October were in line with the expected improvement in trajectory –  Cash collection remained strong on track to deliver reduced net debt at year end of £65-69m (pre acquisitions) –  Building on growth in Q3, net box growth in Records Management continued to be positive in October

–  Restructuring of the business will result in c250 staff leaving the business (during August and to November) –  Following completion of the planned restructuring, only c7% of staff remain furloughed on the Government’s Job Retention Scheme which underlines the strong increase in customer activity levels over the last six months

–  Acquired E Recycling Ltd, a high security IT Asset Destruction (ITAD) business which will further enhance the Group’s strong position in the large and rapidly growing IT recycling market

 

KR1  15p  £19.6m (AQSE:KR1)

The leading digital asset investment company, has started generating revenue from staking activities on the Kusama network, a portfolio holding received at zero cost in line with the Company’s Polkadot  position. Kusama is an incentivised ‘canary’ network for the Polkadot blockchain project. Kusama is designed to battle-test technical upgrades for Polkadot as well as allow aspiring Polkadot parachain projects to test their systems before deploying on Polkadot. However, it is also envisioned that Kusama may become home to a range of lower value blockchain projects, that do not require Polkadot’s ‘stability’ and far superior safety guarantees. As such, Kusama could become an important standalone platform with

To date, KR1 has generated a total of 3,258.70 KSM from staking activities, which thus far have not been realised into fiat currency but instead are being ‘compounded’ by staking them.

Tern 7.75p  £23.33m (LON:TERN)

The investment company specialising in the Internet of Things, announces that it has raised £1,700,400, at 7.5p. The Issue Price represents a discount of 14.3% to the closing middle market price of 8.75p per Ordinary Share on 11 November 2020. The Directors intend to use the net proceeds of the Fundraise to facilitate a new investment in due course, strengthen the Company’s balance sheet to enable the Company to hold strong negotiating positions for any follow-on investment opportunities in the Company’s principal portfolio companies and for working capital generally.  In addition to the Subscription, there will be an offer to retail and other investors via PrimaryBid Limited  at the Issue Price.

 

Head Chef

Derren Nathan

0203 764 2344

[email protected]

 

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