The Small Cap Awards were held in London on 13 June. The winners were:
Company of the year
IQGeo (LON: IQG)
AIM-quoted IQGeo has been one of the best performing smaller companies in the past few years. Over five years, the share price has risen 904%. It won’t be on AIM for much longer. Kohlberg Kravis Roberts has made a recommended bid of 480p/share bid valuing IQGeo at £333m.
IQGeo has developed software that enables large businesses to collate information and geospatial data so that it can be used to build up a visualisation of all the assets in the business. There is a core customer base of utilities and telecoms.
Management thinks that it requires more financial strength even though there is net cash of around £17m. The bidder certainly has plenty of access to funding.
Aquis company of the year
Equipmake
Snetterton-based Equipmake Holdings is a developer electric vehicle drivetrain technology. It designs and manufactures components for its electric drivetrain and integrates them into a system. Earlier this year, the company raised £4m at 6p/share and a further £110,000 from a retail offer. This will fund research and development for the international market and finding opportunities in the US. The cash will last until next spring.
Equipmake has won electric powertrain orders for buses. A few months ago, the company’s order book was valued at £13.1m and mainly relates to the bus market. Interim revenues rose from £1.05m to £2.07m, while the loss increased from £2.79m to £2.96m because of higher admin expenses.
IPO of the year
Onward Opportunities (LON: ONWD)
Guernsey-registered Onward Opportunities Ltd was set up by Dowgat Capital to invest in undervalued smaller companies – generally under £100m market capitalisation. It was seeking companies with qualities such as asset backing, cash flow, growth potential and strong management.
On 30 March 2023, the company raised £12.75m at 100p/share. A portfolio of predominantly AIM companies has been built up. In a time of tough markets, the NAV has grown to 120.14p/share by the end of May 2024. That makes it one of the top performing smaller company-focused investment companies. Some of the better performers in the portfolio are Windward (LON: WNWD) and MPAC (LON: MPAC).
ESG of the year
Eden Research (LON: EDEN)
Eden Research has been quoted for more than two decades – initially on Ofex/Aquis before moving to AIM. The company is developing biopesticides for sustainable agriculture. They can replace less sustainable alternatives currently used.
The company is in the process of gaining approvals for treatments with growth set to come in the next few years, although it is likely to continue to lose money in 2024. This year, it has gained approval for Mevalone in California. Mevalone is a biofungicide that treats botrytis on grapes.
Transaction of the year
Journeo – MultiQ acquisition
In September 2023, Journeo acquired Denmark-based MultiQ, which provides information systems to transport and local government customers, for €2.5m. This increases its exposure to the Scandinavian market. The two businesses have similar markets and Journeo can take over the currently outsourced manufacturing of MultiQ systems.
The cash came out of the money Journeo had in the bank. At the time, Cavendish increased its 2024 earnings forecast from 21p/share to 22p/share.
Technology company of the year
Kooth
Digital mental health company Kooth has developed a platform to provide therapeutic support and interventions and it started to expand internationally in 2021. Kooth gained a significant contract in California covering 13-25 year olds. Services are being provided to the Behavioural Health Virtual Services Platform, and they launched in January 2024. This should be worth $188m over four years.
In 2023, Kooth lost money. This year revenues are set to more than double to £68.7m, with most coming from annualised recurring revenues, and a pre-tax profit of £4.8m is forecast.
Dividend hero/ Investor relations success
Cohort (LON: CHRT)
Defence systems and services supplier Cohort is the only winner of two categories in 2024. A total dividend of 14.7p/share is forecast for 2023-24, up from 13.4p/share. Cohort has an unbroken record of dividend growth since 2006.
Cohort generated 2023-24 revenues and profit slightly ahead of expectations. This year, pre-tax profit of £22.1m, up from £19.1m, is forecast on slightly higher revenues of £200m. The dividend is forecast to rise to 15.6p/share.
Earlier this year, Cohort was awarded a £135m Royal Navy countermeasures contract. The order book is worth £518m and £180m of that should be recognised in the year to April 2025.
Diversity, inclusivity and engagement
TPXimpact (LON: TPX)
Digitisation services provider TPXimpact has grown rapidly through acquisitions and that did cause some problems. The new management is sorting out these challenges and bringing all the businesses together.
Management makes a point of offering flexible working hours and autonomy and says it respects all viewpoints.
TPXimpact says 2023-24 revenues were slightly above expectations at £84m. EBITDA margin was in the middle of the 5%-6% range. Net debt has fallen to just over £7m. There was £139m of work won last year. There could be some short-term disruption from the General Election.
Executive director of the year – Chris Smith – McBride
Analyst of the year – Charles Hall – Peel Hunt
Broker of the year – Cavendish Capital Markets
Lifetime achievement – David Stirling
