Hybridan Small Cap Feast - 23 Feb 23

23 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec

A profitable start to the new year

The new financial year has started strongly with a strong pipeline of opportunities and a lower cost base following an expanded rationalisation programme that resulted in most regions delivering a profit YTD in FY23. The results for FY22 were broadly in line with revised expectations, although the lack of forward visibility results in a continued suspension of estimates. That said, we expect FY23 to prove to be a turning point in the Group’s fortunes as utilisation levels improve now that projec

Return to profitability in Q1 confirmed

Drivers final results were well flagged in the November update, confirming an adj. loss before tax of £1.0m for FY22 (FY21: PBT of £2.0m, FY18 peak PBT: £3.8m) after restructuring costs of £0.6m. FY22 was a challenging year, with all business units seeing a reduction in profitability. Europe & Americas continued to be strongly profitable, with the Middle East and APAC continuing to weigh on Group profits. In response, management has implemented a significant reorganisation in both of these busin

Hybridan Small Cap Feast 11-11-2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Long Term Assets Limited (LTA), a Guernsey investment company, intends to join the Specialist Fund Segment of the Main Market of the London Stock Exchange. The initial portfolio is made up of a diversified range of assets, recently valued in the region of £160m, comprising a complete selection of the Disruptive Capital’s family office private asset portfolio. LTA aspires to be a “best-in-cl

Return to profit anticipated in Q1’23 after FY22 loss

Driver has issued a full year update, which confirms an adj. loss before tax of £0.3m for FY22 (H1 profit of £0.4m, H2 loss of £0.7m). Management has implemented a significant reorganisation in the Middle East and APAC, with further significant cost saving plans implemented. This should leave the business on a more stable footing, with management anticipating a return to profit in Q1 FY23, with further performance enhancements expected in Q2. A strong balance sheet, with net cash of £4.8m at Sep

A sturdier foundation, with positive momentum

Management has undertaken a significant rationalisation programme, successfully commissioned new ERP software, and explored means of reducing central costs to place the Group on a sounder footing moving forward, following an extremely challenging FY22 for Driver Group. The actions are paying off, with Q1 ’23 moving into profit, with further progress anticipated from Q2 onwards. While it is difficult to assess the valuation of a business with no published estimates, what is very clear is the dir

Inflexion point

Driver Group is reaching an inflexion point as it looks to focus operations on the more profitable and less risky geographical regions. Following the H1 period end, management transferred 25 staff in the UAE and Malaysia and several contracts to an unnamed Counterparty in exchange for an advance payment of trade receivables (£2m) and help to collect further monies owed to the Group. As measured by adj. PBT, the interim results were in the middle of the guidance range. We think the resulting red

H1 PBT in line; Restructuring drives improved outlook

Driver’s interim results report revenue of £24.4m (H1’21: £25.0m) and adj. PBT of £0.4m (H1’21: £1.0m). This is a creditable performance against a challenging market backdrop, with the legacy effects of COVID-19, and the impact of the war in Ukraine on some of Driver’s clients and their counterparties. Europe & Americas continued to trade very profitably, offsetting losses in the Middle East and APAC. Post period end, the Group issued an update on its Middle East operations, in particular the UA

An elegant solution

The decision to transfer the bulk of Driver Group’s UAE office to a Counterparty solves an ongoing cash collection issue and saves on exceptional (and cash heavy) costs at the same time: a masterstroke in our opinion. The level of cost savings will be a multiple of previous expectations, with improved cash flow, profitability, and higher consultant utilisation levels in Europe another positive side effect. This elegant solution gives confidence in the strength of leadership now in situ within th

Hybridan Small Cap Feast 23/05/22

Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Psych Capital PLC, intends to list on the AQSE Growth Market. Psych operates the Psych Platform (a business-to-business networking platform), that is developing the Blossom Database pursuant to a third party licensing arrangement. The Company also has an investment of 426,000 common shares in Awakn, a Canadian NEO Exchange listed psychedelics research and clinical group, with operations in the UK and Europe.

Middle East exposure materially de-risked

Driver Group has issued a positive update on its Middle East operations, in particular the UAE. It has agreed with an unnamed counterparty that 25 employees will transfer to the counterparty on 1st June, resulting in annualised cost savings of >£3m, with no associated exceptional termination costs. This compares to the £1m in cost savings identified within the 29th March update. The counterparty will also assist in collecting the associated debtor book of c.£3.5m, c.£2m of which it will pay upfr

A strengthening of the Board

Driver Group is currently part way through a rationalisation of its Middle Eastern and APAC businesses, following losses generated in the regions during H1 ’22. The combination of the new CFO announced, Charlotte Parsons, and the commissioning of a new ERP software will result in more timely reporting procedures and improved management information. Charlotte has extensive experience within the consulting sector and providing high-level strategic and change management advice to several Boards. W

Fix Underway

With plans in place to review the Middle East and APAC regions, the trading update suggests that management were taken by surprise. The rationalisation process is likely to be more severe than originally anticipated, potentially including an overhaul of reporting procedures. We expect the focus to turn to gross margins, cash collection and higher utilisation levels – involving headcount reductions, office closures, and a focus on higher quality customers. The likely scale of the required action

LIBERUM: Luceco* - Margin momentum coming into view

LIBERUM: Yü Group* - Strong momentum and cash flow

Invinity Energy Systems - First Sale In Hungary

Invinity has followed the Hungarian reseller agreement announced on 10 March with a first sale of VS3 flow batteries for an EU funded solar plus storage project in the country. This is in line with the company’s other recent reseller agreements providing strategic access to new energy storage markets. We think it is good to see Invinity securing battery sales at the outset of new reseller agreements as this provides further confirmation of the company’s growing commercial momentum in our view.

LIBERUM: Costain Group* - Free cash more than 50% market cap

LIBERUM: SigmaRoc* - Critical mass demonstrated

LIBERUM: Judges Scientific* - FY22 ahead of expectations

Judges Scientific FY Results – Outstanding results, Steady organic, M&A delivers in spades

Judges Scientific is a group involved in the buy and build of scientific instrumentation businesses. Testament to the strength of its highly engineered offer and global diversified customer base (offsetting Covid-induced earlier weaker order intake from China, although rebounding in December 2022), total revenue increased an impressive 24% to £113.2m (organic basis 8%), buoyed by Geotek, with adjusted PBT increasing a substantial 56.7% to £28.3m (FY2021: £18.1m), 4% ahead of our estimate of £27

Supreme plc: disposal of T-Juice intellectual property

Supreme reports that it has entered into an agreement with an associated company of La Vape Professionelle Distribution (LVP), a leading French wholesaler of e-cigarettes and e-liquids, for the disposal of the intellectual property (IP) of T-Juice, inclusive of the Red Astaire brand. Supreme will receive an upfront payment of €4.5m (£3.97m) in respect of T-Juice brand IP, with the addition of income from consultancy services. The agreement ushers in a new strategic partnership in which Supreme

Strix (KETL LN) - FY22 results in line; early signs of recovery in Controls

Strix has reported adjusted post tax profit in line with guidance, provided back in November, at £23.0m. Revenue of £106.9m is down 10.5% yoy and broadly in line with the Zeus estimate of £110.0m. The decline in revenue is a consequence of destocking across the supply chain in the Controls division. Both the Appliance (+1%) and Water (+8%) divisions showed organic growth yoy whilst benefitting from the addition of the Billi acquisition that completed at the end of November. Importantly, in terms

Hardide Update

The AGM statement reiterated the ‘cautious optimism’ that underpinned the group’s recent annual report (covered in our 9 February update). HDD is experiencing growth across all of its key markets; aerospace, energy and industrial products. First half revenues to end March 2023 are expected to come in around 7% ahead y-o-y. That will be sufficient to deliver forecast EBITDA breakeven in FY23 despite deferral of a c. £0.3m order into H1 FY24. That outcome underlines the success of initiatives to

Hybridan Small Cap Feast - 21 Mar 23

21 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

SHORE CAPITAL - Judges Scientific+ (JDG, House Stock at 8,920p)

SP Angel Spec Sits: (YUG) Stellar 2022 Results + New Dividend Policy

YUG announced its full year 2022 financial results, which exceeded recently revised market expectations.

Hybridan Small Cap Feast - 24 Mar 23

24 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

SHORE CAPITAL - Ultimate Products+ (UPGS, House Stock at 140p)