Hybridan Small Cap Feast 16-09-2022

*A corporate client of Hybridan LLP ** Arranged by most recent first *** Alphabetically arranged Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Independent Living REIT plc, intends to float on the Premium Segment of the Main Market. The Company's investment objective is to address the shortage of high-quality supported housing, delivering capital growth and inflation-linked income returns for its investors whilst providing

Repositioning progress

MYSL broadly broke even at the EBITDA level in FY22 (FY21 A$4.2m). Statutory sales and gross profit reductions reflected the scaling of its marketplace platform, viewed as the right strategy for long term sustainable growth. The group achieved progress in the second half in relation to both costs and inventory management and has a stable platform to pursue growth opportunities in FY23.

Focused on w/c after tougher trading since Dec’21

A combination of factors have contributed to a weaker than expected trading performance in Q2, which has continued into Q3. While some are outside their control, several actions have been taken to improve liquidity to fund ongoing marketplace investment and working capital. A new Loan Note in particular addresses any immediate liquidity risk, albeit c10% dilutive. If the action plans are well executed, the business should get back on track for FY Jun’23.

Well positioned for sustained online growth phase

MySale has been successfully repositioned into a scalable and inventory-light (negative w/c) platform for domestic/global brands to reach ANZ customers. With the building blocks in place, and scale efficiencies emerging, it returned to positive EBITDA in FY21. It now has >1.25m SKUs and improved customer delivery options, supporting better TrustPilot reviews (4.1 vs 1.2 LY). Growth has accelerated in Q1 Jun’22 (GMV+50%). With a new CEO at the helm to sustain this, there is scope for significant

Positive update + entering growth acceleration phase

Adjusted EBITDA was slightly ahead of expectations in the year to Jun’21, moving to a A$4.2m profit (+$6.9m YoY). Strategic initiatives were successfully implemented under its ANZ First strategy, including scaling up its low-cost digital marketplace platform. Management is guiding to revenue growth materially ahead of expectations in FY22 as it enters a growth acceleration phase, albeit margin and earnings dilutive initially due to the different channel mix. On good execution, though, a roadmap

Poised for period of sustained growth on platform

Benefits of the ANZ First strategy are clearly visible and EBITDA margin advanced by 800bps in H1, reflecting the combined benefits of improving gross margin and increased operating efficiency/leverage. With confidence growing, the Board expects EBITDA to be materially ahead of recently upgraded forecasts. MySale is now well placed for a period of sustained profitable growth, which doesn’t appear to be priced in. The Board continues to consider a dual listing in Australia (ASX) to geographically

Strategic & financial momentum drives first upgrades

Strategic and operational momentum has continued in Q2, and gross margin has increased further. Helped by platform automation and the focus on overheads, operating leverage has driven a A$6m BITDA uplift YoY. While still conservative, we have raised our FY21 EBITDA by A$0.3m, a 21% upgrade on a pre-IFRS16 basis. We also have raised our net cash forecast to A$10m. The investment case hinges around the very substantial growth opportunity in ANZ where the channel shift has accelerated. On good exec

Confidence + momentum in marketplace grows

MYSL’s online capability and operating flexibility allowed it to navigate CV19 and pivot from loss to profit in Q4, a trend that strengthened in recent FY21 trading with EBITDA margin already 5%. There is substantial potential for MYSL post-CV19 as the channel shift accelerates in ANZ, and by leveraging counter seasonal opportunities and providing brands with access to its ANZ customers. This includes fresher stock at lower discounts/higher margin. Excess inventory in the northern hemisphere is

Subscription (c£5.1m) to accelerate growth

MySale has proposed a direct subscription to raise c£5.1m (A$9.3m). The new capital is being provided by the founders of Catch.com.au, one of Australia’s most successful online retailers, and should boost confidence in MYSL’s business model and future upside potential. The new holders will have a 9.1% stake. Some proceeds will be invested into its proprietary market place platform. Some may also be used to take advantage of new global branded inventory opportunities, resulting from the pandemic.

Strategic reset + accelerated online shift catapult MYSL into profitability

Following its strategic pivot to an ANZ-first marketplace platform, MySale’s improved online capabilities and operating flexibility have enabled it to navigate successfully through this period of unprecedented disruption, and to take advantage of the increased online demand in Q4, including in homewares. There are significant opportunities for MySale in a post covid19 world as the channel shift accelerates in its core ANZ markets. Taking advantage of counter seasonal opportunities, and providing

New marketplace platform strengthens its position

Despite the opportunities for MySale’s digital marketplace platform presented by sector inventory/supply chain disruption + a rapid online channel shift, there can be no assurances that the recent sales surge is sustained. Indeed NZ rules changed today. Given the uncertainty, the Board is sensibly adopting a prudent approach and has taken immediate steps to preserve its cash position and has at its disposal numerous levers to reduce costs and manage cashflow until certainty re-emerges.

Small Cap Feast

Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. Expected Admission February 2020 The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States

Platform for profitable recovery & future expansion

MySale is executing a clear strategy, focused on the sizeable ANZ market. It is leveraging its proprietary Marketplace platform, which is highly cost efficient, scalable and inventory light. Also the balance sheet is now debt free and cash positive. This facilitates execution of the strategy through to positive EBITDA next year. The new strategy has a near zero risk approach to inventory, and the release of stock/receivables tied up by its previous own buy/wholesale activities is progressing wel

Small Cap Feast

Alumasc Group plc, the prem ium building products, system s and solutions group, has announced its intention to m ove from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019 Expected market cap of £36.5m Argentex a UK-based forex service provider founded in 2011 by its current management team which operates as a Riskless Principal for nonspeculative and forward foreign exchange as structured financial derivatives is looking to join AIM. Offer TBC

Completion of Cocosa disposal. Trading conditions remain challenging

Following the RNS 2 weeks ago, MySale has today confirmed the disposal to Brandalley UK of its UK business Cocosa has completed (for £1.5m). The review of its SE Asia operations, which generated c11% of group revenue in FY18 (and incurred a loss) is ongoing. This is in line with the group's strategy to rationalise its non-ANZ divisions and focus on its sizeable core ANZ markets where there is significant growth potential. However, the update indicates current trading remains challenging and that

Sondrel Holdings - Siemens Holding

Following the news on Friday 1 December that Siemens has, subject to completion, disposed of its 11.2% holding in Sondrel at 6p per share, we see a significant buying opportunity. We believe the sale was for Siemens AG organisational convenience rather than in relation to Sondrel’s fundamentals. We have summarised the history of the relationship, our view on the rationale for the sale and touch on the latest industry outlook. We reiterate our 1-year price target of 74p which is just shy of the h

Intercede - Record contract win

Intercede has secured a major contract win with a large US Federal Agency, $6.6m of which represents licence fee for immediate recognition, with a further $1.4m in maintenance and support. The contract win lifts FY24 forecasts substantially higher, on the back of a previous upgrade last month, by +31% in revenue and +186% in EBITDA, with further improvement in FY25 and FY26 from associated support and maintenance. The order for Intercede’s MyID Credential Management Solutions came after a rigoro

CML Microsystems+ (CML, House Stock at 388p) - Growth in new and existing markets

LIBERUM: Cerillion: Learnings from the CMD

PROGRESSIVE: CML Microsystems: The unusually reliable semis co delivers, again

CML’s interim results to 30 September show that, despite challenging markets, the group continues to make progress. Revenue improved by 5% to £10.6m, up from £10.1m in H1 FY23. Profit from operations was flat at £1.9m, prior to third-party acquisition related costs from the MwT transaction of £0.3m and share-based payments. Cash balances at the period-end were £20.95m (31 March: £22.26m), after significant expenditure on product development, share buybacks and the FY23 final dividend. With the M

Morning Note – 4 December 2023

iomart - Solid interims demonstrate stability

iomart has delivered interims to September in line with unchanged expectations, alongside a small vertical focused acquisition, demonstrating the benefit of organic and acquired growth. 18% group revenue growth included cloud services growth of 20%, which comprised modest organic growth, price adjustments after last year’s strong energy price movements, and some slowdown in organic non-recurring revenue, before the benefit of the Concepta (August 2022) and Extrinsica (June 2023) acquisitions, ad

Morning Note – 5 December 2023

TPXimpact 1H24 Interim Results

TPXimpact reported a strong 1H24 performance and maintains FY trading guidance; we make some small tweaks and overall retain our expectations.

Journeo - The Merry Journey Continues

Journeo has released a positive trading update following strong business activity in October and November. The company references strong trading in its core Fleet and Passenger Systems divisions, as well as the newly acquired Infotec and MultiQ divisions. We expect that the investment made in the Infotec factory to facilitate higher production speed has contributed to clearing the prior backlog and the ability to win new orders. We believe the positive trading momentum will continue into FY24E a

Morning Note – 6 December 2023

Concurrent Technologies - FY23 trading update – revenue growth accelerating

Concurrent Technologies has released a FY23 trading update stating revenues in the current year are expected to be ahead of market expectations. Strong order intake has continued throughout the year and the significant investment in product development undertaken to target design-in wins has brought new customers (especially large Defence sector prime contractors), larger average single order sizes, and an increasing diversification of end markets. So far this year, Concurrent Technologies has w

Initial Equity Trading Comments - 1 December 2023

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties

Morning Note – 28 November 2023