Small Cap Wrap – Watkin Jones, STM Group, Tasty and more…

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Small Cap Feast – 06 November 2020

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What’s Cooking In The IPO Kitchen?

Harrogate Group. The Company offers 90-day residential personality development and vocational courses to local authorities in England for young adults aged between 16 and 18 who have left school but are not in employment or further education to whom the client local authority owes a care obligation under The Children Act 1989. AQSE. No Funds being raised. Due 9 Nov.

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%). Timetable TBC.  

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 ).   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. 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.

 

Breakfast Buffet

Codemasters 434p £661m (LON:CDM)

The award-winning British video game developer and publisher specialising in high-quality racing games, confirmed the release of DIRT 5 today for the PlayStation®4 computer entertainment system, the Xbox One family of devices including the Xbox One X and PC.

The game will also be released on the next generation of consoles, Xbox Series X|S and PlayStation®5, which are launching on 10 November 2020 and from 12 November 2020 respectively. A Google Stadia version is also expected to launch in early 2021.

DIRT 5 provides fans with a new off-road experience set in amplified real-world locations, such as New York City and Rio de Janeiro, alongside the more challenging and remote areas of Greece and China. The game also includes the ground-breaking, brand new feature, Playgrounds mode. Playgrounds combines creativity and community as it gives players the ability to create, share, and discover player-made racing arenas.

 

Sportech 28p £53m (LON:SPO)

The Board confirms that it received two approaches from Standard General about a possible cash offer for Sportech, initially at 25.0 pence and subsequently at 28.5 pence per Sportech share.

The Board unanimously rejected Standard General’s latest proposal, which it believes fundamentally undervalues Sportech’s businesses and prospects. Sportech is an online gambling and entertainment company.

 

Sealand Capital Galaxy 1.6p £8.16m (LON:SCGL)

New contract win for its subsidiary New Sky Global Media Limited , a digital marketing and advertising company providing professional ‘one-stop’ solution services to multinational corporations.  Also updated the market on its developing commercial relationship with the Zhuhai Duty Free Group.

NSG has been awarded a new project by its longstanding client, Suncity Group Leisure Services.  The contract is for NSG to set-up and operate a new Douyin (more commonly known outside of China as TikTok) campaign to promote Suncity’s opportunities in light of the Macau government’s planned activities around the revitalization of its economy and the 67th Macau Grand Prix.  The contract is worth USD 45,000 and runs until the end of December 2020.

Gree Real Estate and Zhuhai co-launched the “Zhuhai Duty Free Mall” mini program and in April 2020 the Gongbei Port Entry Store launched an online duty free product reservation service at the Zhuhai Duty Free Mall, giving Sealand further online sale capabilities.

 

National Milk Records 105p £22.3m (AQSE:NMRP)

Q1 Sep 2020 trading update. NMR is the leading supplier of management information to the UK dairy supply chain.

Turnover for the quarter of GBP 5.32 million (Sept 2019: GBP 5.25 million) an increase of 1.4% 

Revenues for testing of Johne’s disease of GBP 1.06 million an increase of 9.6% versus the first quarter of the prior year 

Year-on-year revenue increases also secured in Surveillance adjacencies and Genomics, 12.4% and 14.0% respectively 

The overall milk recording revenue in this quarter is in line with projected forecasts following the impact of the RYUK cyber-attack and the spring Covid-19 lockdown.

 

Mears Group 146.5p £162m (LON:MER)

The UK Housing solutions provider, today announces that it has entered into a conditional agreement to sell the entire issued share capital of TerraQuest Solutions Limited and its subsidiary undertakings to a newly incorporated private limited company controlled by funds advised by Apse Capital Limited. The Buyer will acquire the entire issued share capital of TerraQuest for a maximum valuation of £72.0m.

 

European Metals 29.5p £47.6m (LON:EMH)

European Metals to pursue a listing on the US-based OTCQX market

Company has commenced trading on the OTC Pink Market under the code PKC: EMHLF

Provides ready access to US capital markets following increasing interest in the Cinovec lithium project

Cinovec project is the largest hard rock lithium resource in Europe and is strategically located in close proximity to end user car makers and companies involved in energy storage

 

Beowulf Mining 4.9p £29.4m (LON:BEM)

Open offer at 3.16p to raise up to £7.13m. Beowulf has received underwriting commitments from certain Nordic investors for up to 80 per cent. (approximately SEK 45.3 million) of the SDR Rights Issue. Beowulf has also received pre-subscription commitments totalling approximately £87,000 regarding the Open Offer and Additional Subscription from certain members of the Board and senior management.   The net proceeds from the Capital Raising, estimated to be approximately £6 million (corresponding to approximately SEK 69 million) (assuming full take-up under the Open Offer and SDR Rights Issue), will be used to advance the Company’s portfolio of assets in Sweden, Finland and Kosovo.

 

Tasty 1.35p £1.9m (LON:TAST)

Further to the recent announcement by the UK Government that, inter alia, all pubs, bars and restaurants are again required to close in light of health issues associated with COVID-19, the Company confirms that it has closed all of its restaurants for in-store dining during the second UK lockdown, until at least 2 December 2020. The restaurants will remain closed until the Company receives guidance from the UK Government to the effect that restaurants are permitted to re-open.

In the meantime, the Company is offering takeaway and delivery services, in most of its units, until such time as the Government announces that it is prohibited from doing so or the Company decides that it is not viable to continue the services. In addition, free takeaway meals will be offered by the Company to NHS workers and children on school holidays.

 As reported in the Interims on 30 October 2020, the Company has been successful in achieving rent reductions and lease concessions on a number of sites. The Company  is continuing consensual negotiations with landlords and other creditors in respect of outstanding rents and anticipates that this process will be completed by the end of November. The Company will again be relying on Government support for employees’ pay and VAT and business rate holidays.

 

STM Group 26.5p £15.74m (LON:STM)

The cross-border financial services provider, has this week signed a credit facility with Royal Bank of Scotland (International) Limited  as first notified on 13 August 2020 when credit terms were agreed in principle by the bank, to support its M&A growth strategy.  

 The credit facility is for £5.5m , is to be used purely for acquisitions, and is expected to be drawn down in line with acquisition milestones by 22 April 2022 at the latest.

 

Watkin Jones 136p £348m (LON:WJG)

The developer and manager of residential for rent with a focus on the build to rent (‘BtR’) and purpose built student accommodation (PBSA) sectors,  provided a trading update for the year ended 30 September 2020.

Resilient operational and financial performance, with seven developments successfully delivered despite lockdown restrictions. 

Nine new development sites secured in the second half of the year, with three more expected to be secured shortly, significantly strengthening our BtR and PBSA pipelines.

Increased activity in the institutional forward sale market demonstrates confidence in the long term demand for BtR and PBSA.  Two PBSA developments forward sold subsequent to the year end.

Strong second half recovery with adjusted operating profit for 2020 expected to be in the range £48.0 million to £50.0 million, with revenues of circa £350.0 million.

Repayment of all COVID-19 financial assistance received from the government this year, totalling £0.8 million, in view of the recovery in performance.

Intention to pay a full year dividend for 2020 in line with our policy of 2.0x cover, reflecting our strong cash position, subject to there being no material deterioration in market conditions.

 

Head Chef:

Derren Nathan
0203 764 2344
[email protected]

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