18 Jan 2010
This week: Another win for Lombard Risk, Cashbox gets its foot in the door, and Idox wins over local authorities
Cashbox (CBOX 2.875p/£4.32m)
Cashbox, the UK’s leading independent ATM operator, has been awarded a contract with Fuller’s, the brewery, to take over the supply of 35 existing ATM machines. This foot in the door may lead to the group wining the ATMs in the remaining 360 pubs in the estate. The contract is for 18 months and the first installation will commence by the end of this month. Furthermore, The Orchid Group has appointed Cashbox to supply and maintain the existing 15 ATM’s which it has inherited as part of an acquisition, along with the opportunity to survey the rest of the 45 sites that they have purchased. The new contract wins provides the group with increasing revenue visibility as its turnaround continues apace. Not one to cash in on just yet.
Datum International (DATP 7p/£2.1m)
PLUS-quoted group that authored the Enterprise Content Management solution KnowledgeWorker last week gave a trading update of strong trading in November and December. The company has closed deals in this period with a combined value in excess of £250,000 with clients including CSC, Bombardier, Thales, Scanplan, Luccini and Metropolis (Greece). David Hornsby Chief Executive commented that he was encouraged by such a strong start to the 2nd half of the year. It is great to see that both revenue generation and a tight control of the cost base means that the board fully expects to announce a profitable full year result. KnowledgeWorker is sold and supported internationally through a growing network of distributors, OEM’s and reseller partners. KnowledgeWorker creates competitive advantage by enabling employees, customers and suppliers to collaborate on information and to participate in managed and audited business processes. The system comprises a fully integrated suite of modules for document management, scanning, business process management, enterprise search and “on-the-fly” publishing to web sites, intranets and portals.
dotDigital (DOTP 1p/£2.93m)
We write on PLUS quoted dotDigital Group for the first time as they announced a trading update for the six months ended 31 December 2009. The period looks to be characterized by continued strong turnover growth with an anticipated like for like increase in excess of 40 per cent. During the period, the Company committed further investment in staff recruitment, taking the headcount to 74 and dotDigital anticipates that the returns on this investment will be seen through continued growth in the email marketing client base and expansion into new areas within the Company. Consultancy, ecommerce services and search engine optimisation operations are now fully operational and starting to deliver revenues in line with expectation. dotDigital Group continues to manage its cash prudently with a net of in excess of £2m, not bad for a market cap of £2.9m, which suggests this stock is severely undervalued. dotDigital Group is a full service digital marketing agency and market leader in email marketing services. Founded in 1999 to provide bespoke website design and development services, the business is industry recognised through its market leading brand name dot Mailer’- a service originally developed as an email marketing solution for a division of the BBC.
Good Energy Group plc (GEGP.PL 58p/£4.53m)
PLUS quoted Good Energy Group has announced an £11.8 million financing package for the repowering of its wind farm at Delabole in North Cornwall. The £11.8 million package includes £9.6 million in debt finance from the Co-operative Bank and £2.2 million equity from Good Energy Group PLC’s own resources. The funding will allow the ten existing turbines to be replaced with four modern, more powerful, Enercon turbines to harness the wind resource more effectively. With a total combined capacity of 9.2MW, these turbines will increase the wind farm’s output by roughly two and a half times, enough to supply over 7,800 homes. Delabole wind farm was the UK’s first commercial wind farm and began generating in 1991 and Good Energy is unique in the supplier industry by buying and selling only 100 per cent renewable electricity. With the company’s focus on improving its financial performance and the new turbines due to come on line Good Energy seems to have the wind in its sails.
Herencia Resources plc (HER 0.635p/£5.25m)
In a second project update following the successful recent fund raise Herencia has announced more details about its new drilling programme designed for the Paguanta zinc-lead-silver project in northern Chile. Major Drilling has been engaged to undertake 3,500m of diamond drilling starting in the second week of February that will target potential high grade extensions to the known mineralisation. Assay results could be available during the April – June period which will allow Herencia to update its Mineral Resource Estimate by mid-year and eventually move to a Feasibility Study phase in the third quarter of 2010.
Idox ( Idox 11.25p/£37.65m)
Idox, the supplier of software and services for the management of local government services reported full year results to the end of October 2009. Despite the extremely tough conditions of 2009, reported revenues were largely stable at £32.2m (2008: £34.0m) with profit before tax down only slightly, £6.7m (2008:£7.6m). Additionally debt was reduced, debtor days down by 30% and net cash significantly increased to £3.2m (2008: £1.0m).The company increased market share up to outstanding 78 per cent of UK local authorities, providing them with the tools to manage information and knowledge, documents and content as well as enabling the provision of council information to the general public over the internet. In the face of the current economic climate and the widely discussed cuts to public spending, Idox remains confident of capital expenditure for their services and software. This means the company will focus on smaller modular contracts and upgrades of software with incremental revenue which are easier to win rather than large unwieldy contracts, which can cause issues with the unpredictability of applying resources. With Idox’s dominant position with Local Authorities the company is in a strong position for industry consolidation and we think will be interesting to watch in 2010.
IPSO Ventures (IPS 58.5p/£7.71m)
Creator of commercial value from technology last week announced that IPSol Energy Limited had secured its first customer revenues within three months of being established. The Company, which was recently created to provide business and technical solutions to the Solar Photovoltaic market, is focused on testing and measurement services and these initial revenues have been generated testing a solar building integrated photovoltaic product prototype for Solarcentury. IPSol Energy is developing the UK’s first independent commercial PV module testing facility, which will provide manufacturers and installers of solar PV modules with third party validation of their products. Shares in IPSO Ventures rose 6p to 54½p on the news and clearly it validates IPSol Energy’s offering at an early stage. This rapid generation of revenue also validates IPSO Ventures demand-led commercial business model, setting IPSO clearly apart from its competitors in the IP model of University spin outs and licensing and developing technology with a view to commercialisation.
Lombard Risk Management (LRM 5.25p/£10.86m)
Lombard Risk Management, the global provider of specialised software solutions that improve the management of collateralised trading, liquidity and regulatory compliance, announced its first regulatory contract win of 2010 taking to six the total of contracts won by Lombard Risk for UK regulatory reporting in the last two months. These six contracts have a total first year value of over £500,000 although the majority of these revenues will be recognized in the financial year to March 2011. One of these six firms is a new client for Lombard and the others are existing bank and building society clients. Given the Liquidity Standards finalized by the FSA in October 2009 we are expecting continued wins John Wisbey, CEO said that “in a world of increasing financial regulation, some of the world’s top banks rely on Lombard Risk to report to regulators and to monitor and manage their risk. Our products in Collateral Management, Liquidity and Regulatory Compliance are all increasingly complementary as banks and regulators alike look in ever more similar ways at counterparty risk, liquidity and collateral flows”. Analysts expect sales for the current year to March 2010 to be no higher than the previous year at £8.7m and another loss whilst Lombard works its way through old underpriced contracts. However, with the revenues from these new wins hitting the top line in the year to March 2011 we expect this one to start climbing strongly on further good news.
Summit Corporation (SUMM 6.5p/£10.81m)
UK based drug discovery company, Summit, ticked up on last week’s news that one of its partners, BioMarin Pharmaceuticals Inc had initiated a Phase 1 clinical study of SMT C1100. This small molecule is an upregulator for the treatment of the fatal genetic disorder Duchenne muscular dystrophy. Initial top-line results are expected in Q3 2010. The DMD programme is one of eight drug programmes that form Summit’s partnered product portfolio. This portfolio requires no further investment from Summit but has contractual, success based development, regulatory and sales milestone payments totalling over $160m plus sales royalties of up to 13 per cent. BioMarin has a great track record in developing orphan drugs to market and is we believe the best partner to develop SMT C1100 into a medicine in the shortest possible timeframe for the benefit of all DMD patients. Although there is no financial milestone associated with this event, the DMD programme was one of Summit’s original drug discovery programmes, and so is a major endorsement of Summit’s own scientific capabilities.
The recent placing provided Summit with financial resources that will last until at least December 2011. We believe that this stock is likely to generate a healthy amount of news flow: we expect news on the Evolva programme based on the licensing agreement, an IND filing in Q3 2010 with a milestone payment attached relating to the Evolva programme and then it would enter the clinic in early 2011. In addition, we would hope to have some data from the Wellcome Trust C difficile programme, announced recently at the same time as the placing, towards the middle of this year and assuming it is positive, it should help get potential partners interested. Well funded drug discovery companies with a portfolio of programmes partnered and worth $160m, and a library of Iminosugars that is the most comprehensive globally with ongoing drug discovery activities are rare and well worth a look.
Verona Pharma (VRP 16p/£39.39m)
AIM-quoted drug discovery company Verona Pharma last week updated the market on progress with respect to its recent fundraising, its most advanced project, RPL554, and its other two ongoing drug discovery projects. Verona Pharma is dedicated to the research, discovery and development of new therapeutic drugs for the treatment of allergic rhinitis (hay fever) and other chronic respiratory diseases, such as asthma and chronic obstructive pulmonary disease (COPD), as well as other chronic inflammatory diseases. The Company currently has three potential drug treatments under development and continues to look for other possible drug development opportunities aimed at the respiratory and inflammatory diseases markets.
Verona Pharma recently raised £3m, providing the Company with a strong financial position. We write on this company for the first time, our attention was drawn to it having received the final quality assured study report from the Centre for Human Drug Research at Leiden University for its Phase I/IIa trial of RPL554. The trial demonstrated that RPL554 produces clear clinical benefits in patients with asthma and allergic rhinitis with a good safety profile. Discussions with potential licensees for RPL554 are ongoing. Verona Pharma is also seeking to develop an anti-tussive drug that works to suppress the generation of a cough signal at the nerve endings in the lungs. Regulatory documents for the proposed clinical trial of its cough treatment, VRP700, have been prepared and are in the process of submission to the appropriate authorities. The trial is expected to commence in Q1 2010.
Verona Pharma has been working hard filing new patents and it continues to look for additional opportunities to enhance its Intellectual Property portfolio. Management is very credible and if you look at the market cap compared to the people involved and quality of the investors who have invested to date, as well as the molecules that it has in development, their various stages and the data generated to date, the company looks extremely undervalued.
WIN (WNN 108p/£10.97m)
Win, the leading provider of managed services over the mobile phone, has given a trading update for the year ending December 2009 and has repeated that margins steadied in the first half of the year and that in the second half it focussed on higher margin sales. Trading in the final quarter has led to a result significantly ahead of market expectations for the year. Revenues will be over £40m (£38.8m for 2008) following a 20 per cent growth in message traffic in the last quarter. A new Next Generation Messaging Platform is being developed and should be ready for Q4 – with an associated depreciation charge of £0.15m. Analysts estimate a pre-tax profit £1.9m for 2009 with 12.6p EPS giving a P/E of 9.1x. A comfortable valuation but still scope for a little more to win.
*A corporate client of Hybridan LLP
The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week. Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.
11 Jan 2010
This week: Lifeline exceeds expectations, Symphony seeks to woo US investors, and a Triple whammy for SeaEnergy
Avation (AVAP.PL 35.5p/£9.31m)
Aircraft rental and leasing company last week announced that it had entered into a conditional letter of intent to purchase one Airbus A320-200. The aircraft is currently in service in the UK and is at this time is owned by an international aircraft leasing company. Avation is an interesting PLUS listed company. Through its subsidiaries, it owns commercial passenger jet aircraft which are leased to various airlines in Europe, the US and Australia. Avation is also a 51 per cent holder in PLUS listed Capital Lease Aviation PLC, and is also a supplier and financier of broadcasting equipment to radio and television broadcasters and offers a procurement service for both airlines and broadcasters to purchase such consumables. It also owns an intellectual property portfolio of innovative digital media broadcasting technology.
With respect to this latest news, Avation has paid an initial deposit for the aircraft of $150,000. The total cost for the aircraft to enter service is approximately $11,000,000 with a base purchase price consideration of $8,600,000. Avation intends to pay for the aircraft from its own group cash flows and in principle has secured interest free vendor finance in respect of US$7,800,000 over a period of three years. The aircraft is being acquired for leasing to Skywest Airlines Limited who have commenced technical and commercial due diligence on the aircraft. Skywest leases planes from Avation and the two companies have traditionally and historically being linked together. On the face of it, it looks like Avation has the opportunity to acquire this aircraft on attractive terms to broaden its fleet, without paying a sky high price!
Beacon Hill Resources (BHR 0.365p/£21.32m)
This AIM listed resource company also had a few announcements last week and started with a trading update detailing the rapid progress made by the Group since its re-admission to AIM on 15 October 2009, following the acquisition of Tasmania Magnesite NL and fundraisings totaling £1.75m. The share price has held steady since its readmission. The first key steps in the development of the Arthur’s River magnesite project in NW Tasmania is underway, including the submission of an application for a Mining Lease and discussions with potential joint venture partners with regard to the construction of a calcination plant. Beacon Hill also stated that it continues to evaluate other potential resources projects which meet the investment criteria of the Group, that being near-term production potential in commodities associated with the steel industry. The Group continues to work to a timetable that will see production at the Arthur’s River Project commencing by the end of 2011. It anticipates being granted a Mining Lease early in 2010 and completing the environmental work required by the end of 2010. The second announcement related to its intention to find other projects with news that it, together with Consolidated Mining & Resources, has entered into an exclusivity agreement with Borneo Mining SA (Pty) Ltd with respect to the potential acquisition of Minas Moatize LDA, which owns and operates a coal mine in the Tete Province of Mozambique, with an estimated resource of 33m tonnes of coal. Minas currently operates a small underground mine producing thermal coal for domestic consumption, however it would be the Group’s intention to develop the resource into a larger open pit operation in order to produce both coking and thermal coal for export markets.
The terms of the acquisition are an initial deposit of US$1m to gain exclusivity to complete due diligence and legal agreements, refundable in certain circumstances and offset against the proposed consideration for the Acquisition should the Acquisition complete. The Group proposes to finalise the Acquisition in a joint venture, and is currently in discussions with potential partners, whom would also be expected to enter into off take agreements for the coal to be produced. Beacon Hill also announced that it has raised more equity: £1.25m through another placing at a price of 0.3 pence per share. The proceeds of the fundraising will be used to assist funding the Group’s due diligence commitments with regard to the acquisition of Minas. Beacon Hill aims to take a portfolio approach to resources and so we expect further news flow of acquisitions of assets, in the first instance on the progress with respect to the potential Minas acquisition. We like the themes that Beacon Hill is adhering to: near to production and commodities associated with the steel industry.
Earthport (EPO 15p/£13.50m)
On 30th November last year we reported that Earthport, the troubled inter-bank payments company, had expanded into South America by way of a franchise agreement with Zinc Financial SA. Zinc was to pay a franchise fee of £3.25 million by 21 December 2009. At the time we commented on the lack of publicly available information on Zinc and hoped that the company would avoid the mistakes made last year when another partner defaulted on a similar payment. It was therefore bizarre for the payments specialist to have to confess on 22 December that the cash from Zinc had been delayed due to “internal procedures” at Zinc’s bank. Not surprisingly the share price continues its earthbound trajectory.
Eden Research (EDE.PL 21.5 p/£13.27m)
We cover this PLUS listed UK agrochemical development company for the first time. Eden has announced that it has entered into a development option and license agreement with Teva Animal Health Inc for all veterinary health applications using Eden’s encapsulation technology and terpene formulations in the North American region. The option and license agreement provides for Teva to pay milestone payments totalling $1.05m, plus royalty payments once sales of the products begin. Teva will also have a first right to negotiate for an exclusive license on the same basis to develop, manufacture and market products in the rest of the World. Teva is a well known and well respected company and clearly this deal underpins the interest in and commercial value of Eden’s technologies and products.
Goldplat plc (GDP 13p/£14.52m)
Less than a week after the African precious metals recovery and mining company gave an operation update highlighting that improved cash flows from its recovery operations would be channelled into a project portfolio of primary production, Goldplat announced that it has entered into a deal with the option to acquire the Nyieme gold project in Burkina Faso from Sanu Exploration. The 246 sq km project consists of high-grade quartz veins. Goldplat aims to prove up the economic viability of the project and will be funding an initial $500,000 for further exploration including a 2,500m diamond drilling programme for 2010. Goldplat will make payments to Sanu totalling $215,000 and fund exploration expenditure of $500,000 for the option to acquire Nyieme before October 2011.
Lifeline Scientific (LSI 115p/£9.70m)
A few months ago, we discussed the many positive signs of a turnaround at Lifeline, the medical technology company whose Organ Recovery Systems business is to enhance human donor organ preservation during transport – a huge improvement over the traditional ice box solution. In a trading update the company announced that business in the second half has continued to be strong indeed and has been exceeding management’s expectations. The company now expects to show profitability for the year.
Minster Pharmaceuticals plc (MPM 5.8p/£3.42m)
We pointed out a few weeks ago that Minster was valued at a lot less than the cash amount in its bank account and that no value was assigned to its two compounds in clinical trials, Tonabersat and Sabcomeline. The cash-rich biopharmaceutical company Proximagen took notice and is offering to buy the entire share capital of Minster for 6p per share which is a premium of 45 per cent to the closing price on 31st December. The terms of the offer have been agreed by both the boards of Minster and Proximagen.
Ovoca Gold plc (OVG 3.85p/£16.58m)
Some six months ago we speculated that Ovoca, the Russian based international precious metals exploration company that was sitting on more than $50 million in liquid assets after the divestment of its major project, would soon be looking to add new projects. The company announced just before Christmas that it has entered into a conditional agreement to acquire a portfolio of gold exploration companies in Magadan for a consideration of $7 million upfront and contingent deferred payments of up to $18 million. The target companies are currently owned by directors of Ovoca and as a related party transaction the deal is conditional on the approval of independent shareholders at an extraordinary general meeting on 15th January.
SeaEnergy (SEA 71.25p/£43.24m)
Off shore wind play SeaEnergy PLC (previously Ramco Energy PLC) has had an interesting week with things coming in 3’s: 3 separate announcements and the stock running up alongside each one. The stock broke out of its trading range of 55-57 pence and started to head north to the mid-80’s, with the first announcement on Wednesday. SeaEnergy has successfully tendered two sites offshore Scotland and is awaiting a decision from the UK’s Crown Estate regarding Round 3 – the subject of excitement this week. The first announcement was a statement by EDP Renováveis S.A., its partner, who announced that they had together bid for Zones in the UK round 3 wind farm leasing round coordinated by The Crown Estate. EDPR and SERL incorporated in 2009 a joint-venture designated Moray Offshore Renewables Limited, in which EDPR holds a 75 per cent shareholding and SERL a 25 per cent interest, with the purpose of participating in the third offshore wind farm leasing round in the UK round 3. EDPR, following a request from the Portuguese securities market commission, released a statement in which the new news was that the Crown Estate has recently notified its intention of selecting MORL as one of the zone partners of the UK Round 3, although the effective outcome of such UK Round 3 was expected to be announced on Friday 8th.
The second announcement came on the much hailed day of Friday 8th from SeaEnergy in the morning, to say that it expected further news later in the day!
The final and third announcement came on Friday late morning, this time from EDP and SeaEnergy jointly! Not surprisingly, they announced that they had been awarded acreage by The Crown Estate (Zone 1) to develop offshore wind farms in the Moray Firth, Scotland, next to SeaEnergy’s existing Beatrice site, with an approximate installed capacity of 1.3GW, as part of the UK Round 3 awards, enough to power 730,000 homes. Not only is this great news, but 1.3GW is much more than the 500MW that was expected. The awards were announced following The Crown Estates Round 3 Offshore Wind application process, which aims to deliver 25GW of wind power installed capacity. Forty applicants put forward applications for the nine zones which The Crown Estate opened to tender in June 2008. The 32GW of installed capacity proposed by the offshore wind energy developers for 2020 would supply a quarter of the UK’s electricity needs.
Energy and Climate Change Secretary Ed Miliband on Friday said: “Our Island has one of the best wind energy resources in Europe and today’s news shows we are creating the right conditions for the energy industry to invest in harnessing it. This is one of the strongest signals yet that the UK is locked irreversibly into a low carbon, energy secure prosperous future.” Steve Remp, Chairman of SeaEnergy PLC said: “The UK Round 3 awards mark a new dawn for Britain’s offshore wind potential, and coupled with our existing projects in Scotland and Taiwan we are very excited to be at the heart of it.” MORL will now do further assessments of the site and the intention would be to submit planning consents in 2013. SeaEnergy will need to find £10m of investment for this newly awarded site over a number of years.
Helping this, will be the recently announced SOCAR arbitration settlement of $4.9m, which has been paid to SeaEnergy and was announced on December 30th. The SOCAR issue – State Oil Company of the Azerbaijan Republic – was creating somewhat of an overhang, so with that out of the way and settled and this news on the UK Round 3, there is no holding SeaEnergy back. SOCAR represents an end to SeaEnergy’s (Ramco’s) oil and gas days and this morning SeaEnergy announced that David Laing – who was instrumental in helping to settle the SOCAR arbitration – has been appointed as a non executive director, given as Steve Remp said that “this is an ideal time for David to join the SeaEnergy Board and play a similarly valuable role in helping us build SeaEnergy into a dynamic force in the renewable space.” In our opinion, there is nothing to stop this company going global given the caliber of its team and management, which is very much international in its experience. We expect to see further announcements on progress in the UK and Scotland and wouldn’t be surprised to see news of a more international flavour also.
Silence Therapeutics (SLN 18p/£50.38m)
Silence, a leading European biopharmaceuticals company focused on RNA interference (a gene silencing technology), has completed the merger with Intradigm Corporation. The combined business should enable the company to offer the pharmaceutical industry a broader choice of RNAi delivery technologies thereby obtaining higher value deals. Silence already has a research and development collaboration with AstraZeneca, a license agreement with Quark Pharmaceuticals and an in-house cancer development programme that are all based on its proprietary AtuRNAi molecules.
Solomon Gold PLC (SOLG 7.75p/£8.39m)
Solomon, an exploration company with a number of highly prospective licences in a region that is known for giant copper/gold porphyry systems, has confirmed that the acquisition of Queensland based Acapulcu Mining has been executed. As we reported a couple of months ago when the company raised funds, this acquisition is part of a new strategy to diversify away from the pure exploration portfolio in the South West Pacific by adding lower risk, low cost exploration programmes in eastern Australia.
Symphony Enviromental (SYM 11p/12.52m)
Symphony has announced an interesting technical stock market development. It has launched an American Depository Receipt (ADR) programme under which its ADRs will be traded “over the counter” in the US. Symphony believes that US investor interest cannot be fully tapped with its shares just traded on the AIM market and that an ADR programme will assist US investors in purchasing the stock. The share price was up fractionally on the news so if the company was expecting a wall of US money to they’d be disappointed. Nevertheless, building investor interest is a long term process and we’ll be watching with interest the extent to which a small AIM stock like Symphony will be able to attract US investors.
Synchronica (SYNC 3.25p/£17.32m)
Synchronica, the mobile email and data synchronization provider, has announced that it has had a very active end to the year with a number of contracts being signed and orders being delivered to customers during late December. The revenue relating to these contracts and orders is expected to be recognised in 2009. However, the announcement then states rather cryptically that “once the final documentation has been received, further announcements will be made to the market”. The Company has clarified the statement that the contracts have been “signed” by explaining that apart from those contracts signed in November and December the company also commenced working in 2009 on deals to be signed shortly. As the auditors will apportion revenues to the period in which the work was undertaken the Company expects that a portion of the revenue from these deals will also fall into the 2009 numbers.
TyraTech, Inc (TYR 9.5p/£2.06m)
Following two disappointing trading updates last year, the board of TyraTech, a company with a unique eco-technology for safe and effective control of pests, parasites and insects, has announced the resignation of the CEO, Doug Armstrong as Alan Reade, formerly a non-executive director, assumes the role of Executive Chairman. We think this is mostly unfortunate noise as TyraTech continues to transition itself away from the “old” businesses and starts to reap the benefits from the implementation of the highly scaleable strategy that will finally enable the full deployment of its technology. We should see increasing revenues from the company’s partnering model over the coming months and with a much lower cost structure and development capital being carried by the partners it is not a stretch to see TyraTech break even this year. The current market cap gives no justice to the value of this unique technology.
Zenergy Power (ZEN 119p/£61.65m)
Zenergy, the superconductor energy technology company, has received an order for a Magnetic Billet Heater (MBH), the low-energy/ high-productivity superconductor induction heater – this brings the total units sold in the past six months to three. Zenergy is particularly proud of this order as it’s the company’s first repeat order. The share price is off from a high of about 140p only three months ago so this looks a good opportunity to buy on current prices.
*A corporate client of Hybridan LLP
The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week. Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.