Hybridan Small Cap Feast: 30/10/2024

* A corporate client of Hybridan LLP

** Potential means Intention to Float (ITF) has been announced, or it is a rumour

***Arranged by type of listing and date of announcement

****Alphabetically arranged

Share prices and market capitalisations taken from the current price on the day of publication

Dish of the day

Delistings:

Gulf Investment Fund (GIF.L) has delisted from the specialist fund segment of the main market

What’s baking in the oven?

ITF announced:***

Potential**  Initial Public Offerings:

17th October 2024: Selkirk Group, a newly incorporated company established with the primary objective of acquiring a company or business which the Directors believe is undervalued and providing them with their own listing on the AIM market to create shareholder value or acquiring an existing public company and providing a highly incentivised management team with strategic direction. The Company is focused on acquiring business which are headquartered in the UK. The Company is primarily focused on the small and mid-cap market, specifically within the Consumer, Technology and digital media related sectors. Expected first day of trading in late October with an expected size of primary offer of £7.5m.

Banquet Buffet****

DXS International Follow | INX.L0.75p   £0.56m  (AQSE: DXSP)*

The healthcare information and digital clinical decision support systems provider to primarily the NHS reports its Final Results to April 2024. These need to be put into context as a loss of £4.7m are reported on a 2.4% decline in Turnover to £3.3m. This is the result of the decision to write off £4.4m as an impairment charge against the development cost of new products intended to be sold to the NHS. The Directors state that the lack of take up is because of the NHS budget constraints in health technology investment and its slow adoption of new innovative technology solutions.  Therefore, it cannot predict timing for any revenue generated from these new products.  The pre-impairment loss was £495k and there is available cash of £90k plus unutilised debtor drawdowns of £o.38m.   The Directors remain confident that awareness is growing in the NHS about the power of digital technology to unlock productivity and improve patient outcomes, so these solutions could, in future, become revenue producing.  There was evidence of this in yesterday’s announcement of the first NHS contract for its ExpertCare Clinical Decision Support solution.  It has a clear measurable return on investment and  the CEO states it will help reduce waiting lists and the public health cost burden.

Eckoh Technologies  Follow | ECK.L 51.5p  £122m  (ECK.L)

Eckoh is being acquired for 54p a share in cash valuing it at approximately £169.3m implying an enterprise value of approximately £161.8m and a multiple of 15.9x Eckoh's adjusted EBITDA for the year ended 31 March 2024.  The acquirer Bridgepoint Development Capital views Eckoh as a leading provider of secure payments and customer engagement software, with a strong management team and differentiated positioning in a niche market. The sector is expected to benefit from tailwinds, including continued investment in technology, the rise of omnichannel interactions and the growing need to protect sensitive data. Bridgepoint believes that the right additional investment will help unlock Eckoh's potential through geographic expansion, product innovation and targeted acquisitions enabling Eckoh to grow its customer base and drive long-term profitable growth. The acquisition is expected to complete during Q1 2025.

Gooch& House Follow | GHH.L428p   £107m (GHH.L)

This specialist manufacturer of optical components & systems announces that it has acquired UK-based Phoenix Optical for up to £6.75m. This acquisition extends G&H's precision optics capabilities in its Aerospace & Defence markets and creates new opportunities for the cross selling of the combined capabilities. Phoenix supplies polished, coated and assembled precision optics internationally and has one of the largest diamond turning facilities in Europe. The combined group has complementary specialist capabilities in precision optics, so can serve a broader customer base with a comprehensive portfolio whilst achieving synergies from sharing manufacturing capacity and optical systems engineering expertise.

Hemogenyx  Pharmaceuticals Follow | HEMO.L1.35p   £18.8m (HEMO.L)

A biopharmaceutical Company focused on developing therapies for blood diseases announced the schedule for the opening of the first clinical site for its lead asset, HEMO-CAR-T. This targets relapsed/refractory (R/R) acute myeloid leukemia (AML) in adults. The Institutional Review Board (IRB) site approval is anticipated by the second week of November. Following IRB clearance, a Site Initiation Visit is expected to take place in the third week of November, marking the official launch of the Phase I clinical trial. This Phase I trial is designed as a dose-escalation study to evaluate the safety profile of HG-CT-1 in adult patients with R/R AML. Key secondary objectives include efficacy, survival and duration response which are pivotal for assessing the overall clinical impact. The start of the trial is  a major milestone to develop transformative therapies for patients battling relapsed and refractory acute myeloid leukemia and it offers a potentially life-saving solution to patients with severe blood cancers.

Nexus International 127.5  £12m (NEX.L)

The provider of essential infrastructure solutions announces the acquisition of Coleman Construction & Utilities Ltd, a civil engineering & construction business founded in 2000. It will cost up to £5.38m and is expected to be immediately earnings enhancing; the initial payment is £3.1m with further payments on finalising accounts and future business performance. The acquisition is experienced in several key sectors including water, rail, highways, and rivers & marine. It represents a compelling strategic fit for Nexus, entering new sectors and bringing highly complementary services with the benefit of long-term opportunities and less vulnerability to short-term fluctuations. The September 2024 Trading Update is in line with market expectations and expects to report revenue of £56.7m. The Board say the balance sheet will remain strong after the acquisition with cash and cash equivalents of c. £9.8m and expects to pay a final dividend in line with FY23.

SDI Group  Follow | SDI.L 53p   £55.4m (SDI.L)

The buy and build group, focused on companies which design and manufacture specialist lab equipment, industrial & scientific sensors and industrial & scientific products announces what is expected to be an earnings enhancing acquisition.  The net consideration for InspecVision is  £6.1m which is a  designer and manufacturer of computer vision-based measurement systems for industrial applications. InspecVision was profitable for the Y/E December 2023, with an adjusted EBIT of £0.84m on revenue of £3.2m. It’s focused on the high value metrology market and has a blue-chip international client base with US exposure providing cross-selling opportunities. The acquisition brings into the combined group new technological capabilities including AI and machine learning, and strong IP, which can be leveraged. The management consider this acquisition  to be a rare opportunity to capitalise on future growth in the metrology market.

 ValiRx 1.9p  £2.5m (VAL.L)

A life science company focusing on early-stage cancer therapeutics and women's health announces an amendment to the Letter of Intent with TheoremRx Inc from what was reported at the recent Interims. The exclusivity has been extended for a limited time until 31 December 2024 in exchange for a 0.5% equity interest in TheoremRx following the potential reversal into a US listed shell as the fund raising is progressed. The LOI and proposed Licence Agreement (as referred to originally  in the announcement of 2 November 2021) remains non-binding and there is no guarantee that this Licence Agreement will be executed or that it will generate material revenues.

Venture Life  Follow | VLG.L42p £53.4m (VLG.L)

The developer, manufacture and commercialiser of products for the international self-care market acquires Health & Her Ltd, a specialist female health business founded in 2018. The upfront cash consideration is £7.5m with a further £2.4m is payable 12 months post completion, dependent retaining key and trading results.
The focus is on the transitional elements of hormone health, providing supplements and digital support for the female hormonal health journey. The menopause and peri-menopause products currently constitute most the business's revenue.
The global menopause market was estimated at $16bn in 2023 (by Grand View Research), but Forbes Magazine estimates it to rise to $600bn by 2030. Revenues for the financial year ended 31 May 2024 were £6m with a loss before tax of approximately £0.4m. The VLG Board believes that the historic profitability of the business was significantly impacted by costs invested to build awareness of Health & Her's brand and to develop best in class technology solutions to reach its consumers. Venture Life will invest to drive the growth by expanding its reach and generating synergies with its current portfolio and operations.

Zentra Group  Follow | ZNT.L3p  £1.16m (ZNT.L)*

The property development and management company, previously known as One Heritage Group, has announced its FY results to June 30 2024 this morning. Revenue is 6%  lower at  £14.65m reflecting a reduction in sales completions from 71 to 52. The loss before tax increased to £3.56m from £2.1m which included a 24% reduction in impairment charges to £0.82m. Impacting these results are increases in costs of materials, sub-contractor prices, delays experienced and the higher cost of debt. The £10.98m One Heritage Property Development shareholder loan has been renegotiated and extended to December 2025, with the ability to extend for a further 3 years. There are also improved financing terms including securing a new Related party £7.0m facility at 6% interest rate (down from 7%). There is newly negotiated £1m, 18 month working capital facility which can be drawn down as required. These actions reduce the interest burden and increase financial flexibility. The rebranding and new strategy puts distance away from the self-delivery, reduces exposure to Co-living, and realigns the cost base and staffing structure and the directors expect to restore profitability and increase shareholder returns.

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