Small Cap Wrap: Month: January 2012

AIM Breakfast - Archive

31 January 2012

This week: Avation flies new wings, Seeing looks to the future and Stellar updates.

Through the ups and downs, the FTSE closed where it opened the week at 5,740 points, though the AIM All Share tracked up by 9 points higher to 764 points. Whilst there was some good news from the US, with a fourth quarter growth rate up from 1.8 per cent to 2.8 per cent and a 0.2 per cent drop in the US Unemployment rate for December to 8.5 per cent, Europe continued with its woes- the Spanish economy contracted by 0.3 per cent in the fourth quarter, France cut its 2012 growth forecast from 1 per cent to 0.5 per cent and a downgrade for Italy and Spain by Fitch. The week ahead sees Bank of England household lending data, PMI construction and manufacturing data and the Nationwide house prices index.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

TTR Trading Update, ALN Takeover Completed, AGL Interim Results, ANCR Trading Update, AVAP New Aircraft, BAO Tenge Results, DLC Trading update, DESC Current Strategy and Financial Position, EBQ Interim Results, EVO Completion of R&D and Validation of its LabSkin™, FTC Interim results, FIP Successful Completion of Clinical Trial, GAL Land Purchase, GON Full Year Results, GEMD Q4 Trading Update, GGG Quarterly Report, GDP Operations Update, KBT Update on Possible Offer and Strategic Review, MDW Trading Update, NTOG Directors’ Dealings, OXP appoints partner, PSL Trading Update, RSI US$0.7m Project, SEA Strategic Update, Board Changes, Disposal of Montenegrin Interests, SEE launch of latest version and establishes consultancy, SER Trading update, SVR trading update, SOG Trading Update, STEL Interim results, TEG Sale process and TPJ Project update.

32Red (LON: TTR 46p/£32.17m)
The online gaming operator has reported record revenues in its update on trading for the year ended December 2011. Revenues in 2011 were up 48 per cent to £25m, having risen 33 per cent in 2009. Overall performance was again dominated by the growth in the 32Red Casino which has been driven by significant new player recruitment throughout the year, particularly during the last quarter.

Despite the further increased levels of marketing spend throughout the second half of the year; the continued strengthening of revenue growth will result in 32Red Plc delivering profits comfortably ahead of current market expectations for 2011. Trading in 2012 to date has been strong across the Company’s products with Gross Win for the first twenty-four days in January up 67 per cent on the corresponding period in 2011. The Company has also announced that it has applied for an Italian remote gaming licence and, if successful, intends to commit marketing and operational resources in 2012 to gain a foothold in the Italian online casino market.

Alterian (LON: ALN n/a)
SDL (LON: SDL 689p/£545.78m) a leading provider of Global Information Management solutions, announced that it has completed the acquisition of Alterian. SDL has acquired Alterian, a leader in marketing analytics, social media monitoring and campaign management, for a net cash consideration of £69.7m. The SDL Board believes the addition of Alterian’s integrated marketing platform capability will bring strong synergies and enhancements to SDL’s Global Information Management strategy that helps global businesses engage with their customers in the language and in the media they choose. There is an excellent strategic fit in combining the marketing analytics, campaign management and social media capabilities from the Alterian product suite with that of SDL’s leading global Web Content Management, eCommerce and Structured Content capabilities.

Angle (LON: AGL 73p/£26.36m)
Angle, which focuses on the commercialisation of technology, announced its unaudited interim results for the six months ended 31 October 2011. The Company recorded a loss before tax of £1.8m in this period, which is attributed to the costs in increasing its holdings in Parsortix and Novocellus to 90 per cent and 92 per cent respectively, and due to an impairment of the holding value of the Acolyte Biomedica earn-out of £1.3m following a court judgement. Fundraising in the period raised £1.25m and a further round of fundraising of £1.2m was announced on 26 January 2012. During the half year the cash balance increased from £0.6m to £1.1m. During the period Angle agreed new terms in the partnership with ORIGIO to accelerate the progress of Novocellus’ EmbryoSure product to market with accelerated trials to begin shortly. Under the agreement milestone payments of up to £4.5m and royalty payments of up to 25 per cent of net sales of EmbryoSure need to be made for twelve months beyond the life of the patents. The rest of Angle’s portfolio also announced positive news starting with Parsortix announcing its cancer diagnostic device had been validated and work could now begin on product development. Geomerics, which is 33 per cent owned by the Company, has now employed its Enlighten technology in twenty video games titles worldwide. NeuroTargets, 65 per cent owned by Angle, announced positive pre-clinical results for its use of galinin to treat multiple sclerosis and Alzheimer’s disease. Angle will use its fundraising capital to primarily support the revitalised Novocellus agreement and the development of the Parsortix cancer product.

Animalcare Group (LON: ANCR 149.5p/£30.66m)
Animalcare, a leading supplier of veterinary medicines, announced a trading update ahead of its Half Yearly Report of the 6 months ending 31 December 2011 due on 20 February 2012. Total first half revenue was 10 per cent lower than the previous comparable period, and the Company attributes this to temporary supply problems of its key product, Buprecare, and the economic downturn. Sales of veterinary pharmaceuticals launched in the previous year grew 115 per cent year on year. Additionally, the Company launched four new licensed medicines and has two other important products on track to be potentially launched in the second half of the financial year. In other news, the Company announced that Chris Brewster has joined the Board as Chief Financial Officer with effect from 31 May 2012. Mr Brewster previously had roles as Group Accounting Manager at Findus Group and Senior Audit Manager at KPMG.

Avation (LON: AVAP 105.5p/£44.70m)
Aircraft rental and leasing company announced that it has agreed to acquire an additional two new ATR72-500 aircraft, which are to be leased to Skywest Airlines, which will operate the aircraft on behalf of Virgin Australia (under a 10-year wet-lease). The lease is likely to commence within fourteen days, and is in addition to the aircraft leases that have been previously agreed by the companies, taking the total number of these aircraft to 15. A good update for the Company, demonstrating the continuing demand it is benefitting from.

Baobab Resources (LON: BAO 13.75p/£25.99m)
Baobab Resources, an iron ore, base and precious metals explorer with a portfolio of exploration projects in Mozambique, reported that the first round of drill results from Tenge were encouraging and show a strong correlation with the grade characteristics of the Ruoni North and Ruoni South resource blocks. The Tenge resource, due out in March, is expected to push the global resource base well beyond Baobab’s targeted 300 million tonnes which will allow scope for ramping up production. The Company has drawn together a team of industry specialists to complete the pre-feasibility study in good order and looks forward to regularly updating investors on progress.

Delcam (LON: DLC 555p/£44.04m)
Delcam, a leading UK developer and supplier of advanced software solutions for metrology, product development and manufacture, this week provided a trading update for the financial year to 31 December 2011. Further to the announcement issued on 14 November, following a strong finish to trading at the year-end and taking into account the latest actuarial information on the Company’s defined benefit pension scheme, the Board now expects profit before tax to be ahead of current market forecasts of £3.2m (stated before share option charges of £0.1m). Full year revenues are expected to be approximately £41m, with revenues for the second half setting a new record for a half year period.

Designcapital (LON: DESC 14.5p/£10.19m)
Designcapital, the suspended AIM listed investment company in the high end contemporary furniture design sector, this week returned to trading following the appointment of a new nominated adviser and publication of accounts for the year ended 31 December 2010.   The Board also sought to clarify its financial position and investment policy and to update the market on its business strategy. The Directors have concluded that, notwithstanding certain future financial support, the circumstances represent a material uncertainty that casts doubt on its ability to continue as a going concern but that the Directors have a reasonable expectation that the Company will continue in operational existence for the foreseeable future and at least until the end of December 2012. The Directors will continue to actively monitor any investments or acquisitions made by the Company, neither they nor the Company shall take part in the day to day management of the underlying investments, unless required by law or by special situations.

Ebiquity (LON: EBQ 81.5p/£47.94m)
The marketing performance management specialists have reported that its strategy delivered significant growth against key metrics in the six months to October 2011. Ebiquity provides services to over 900 clients across 70 countries, including 85 of the world’s 100 largest advertisers. Total revenues rose 17 per cent year-on-year to £24m, with organic growth from continuing businesses up 6 per cent. Underlying operating profit rose 75 per cent to £2.5m. The company is continuing to develop its international business. Offices in Russia and Asia Pacific have been added via acquisitions of leading media benchmarking businesses. Acquisition of Echo Research has added essential “non-paid” media analytics and reputation management to its global offering. 75 per cent of total group revenues now come from outside the UK.

Evocutis (LON: EVO 2.62p/£4.55m)
The Company focused on advanced laboratory and clinical evaluations of skincare products for the health and cosmetic markets is pleased to announce completion of R&D and validation of its LabSkin™ full thickness skin model for use in supporting anti-ageing claims. Validation of the anti-ageing LabSkin™ model will provide the cosmetics industry valuable data for assessing trial endpoints, when testing the activity of their ingredients and products. This data can be obtained prior to expensive human use studies, significantly reducing the risk and timelines associated with traditional product development. LabSkin™ is being actively promoted as an animal-replacement technology and is suitable for assessing many of the endpoints required by the cosmetic and healthcare industries for products used on skin.  It is anticipated that validation of LabSkin™ for assessing skin irritation, sensitisation, penetration, UV damage, antimicrobial activity and prebiotics will be announced to the market in the coming months.

Filtronic (LON: FTC 23.75p/£22.94m)
The designer and manufacturer of microwave electronics products for the wireless telecoms infrastructure market has reported a 28 per cent increase in revenues from continuing operations to £10.5m in the first six months to November 2011. Operating losses fell to £1.2m compared with £4.4m loss in H2 2011. Cash balance at end-November was £3.9m compared with £4.1m at end-May 2011. Filtronic Wireless has continued to broaden its range of projects following successful trials and initial production deliveries, especially to the US market. Management expects further progress in the Wireless business in the second half of fiscal 2012.

Fusion IP (LON: FIP 53.5p/£38.95m)*
The university commercialisation company which turns university research into business announced that its portfolio company, Diurnal’s, lead product Chronocort(R) has successfully completed a clinical trial in healthy volunteers. Based in Cardiff, Diurnal is developing a novel approach to drug delivery that will help patients suffering from reduced levels of the key hormone cortisol (hydrocortisone). Chronocort(R) is a modified release therapy that delivers hydrocortisone in a manner that mimics the body’s normal circadian rhythm (the body’s natural 24 hour hormone cycle). This therapeutic approach has the potential to help patients suffering from diseases due to cortisol deficiency: congenital adrenal hyperplasia and adrenal insufficiency. Each of these diseases requires life-long treatment and Diurnal’s novel approach to drug delivery has the potential to significantly improve patients’ lives. The company hopes to move into Phase II trials during 2012, with an estimated Phase II completion date of mid-2013. Chronocort(R) has already received two related Orphan Drug designations from the European Medicines Agency, which affords ten years of market exclusivity after the grant of marketing authorisation in Europe. FusionIP has a 43.1 per cent shareholding in Diurnal.

Galantas Gold Corporation (LON: GAL 4.12p/£9.72m)
Galantas Gold the producer, developer and explorer with a 100 per cent interest in Ireland’s only operating gold mine, has purchased through its subsidiary, Omagh Minerals Limited, a strategic parcel of land near Omagh, County Tyrone, Northern Ireland. The freehold land parcel is contiguous with the mine and lies to the north-west of the existing land holding. It comprises an area of approximately 52 acres and was purchased for £247,000. Part of the land overlies the Joshua Vein discovery, for which drilling results were recently detailed in the formal announcement of 12 January 2012. This land has been financed from cash generated from operations.

Galleon Holdings (LON: GON 3.25p/£5.44m)
AIM quoted media Company that publishes digital online and mobile content in China and develops and produces global multiplatform entertainment, announced results for the year to 30 September 2011. Though revenue declined to £10.89m (2010: £14.66m), the Company was still able to post narrower losses for the period, coming in at £2.84m (2010: £20.31m, this prior year figure was impacted by an impairment of assets, provision against loans and receivables and share option charges). Having faced significant changes to the mobile market in China last year, the Company embarked on a restructuring of operations laying the foundations for growth in China as a digital publisher, and the current year loss somewhat reflects the investment in this area. The year has seen monthly revenue for digital grow to £850k per month, and  Galleon continues to expect significant growth in this area, with online gaming in China growing some 32 per cent in 2011. The Company is also finding increasing opportunity in its entertainment business, for example the rights to Super Soccer Star was licensed to Indonesia and the series was aired in Indonesia over the summer of 2011 on MNC TV. With an increasing number of games on the horizon, Galleon expects a return to profitability for the year ahead.

Gem Diamonds (LON: GEMD 210p/£290.36m)
In 2011, carat production reached record levels at Letšeng, with continued recovery of high value, exceptionally large diamonds. Project Kholo, Letšeng’s production expansion project, received Board approval in November 2011 and it is planned that ramp up to full expanded production capacity will occur by July 2014. At the end of the year, the company has a strong cash position, with approximately US$158m. Production improved significantly at the Ellendale mine during the period, with November’s carat recovery being the highest of 2011. Phase I development of the Ghaghoo diamond mine in Botswana is progressing well and remains on budget, with the box cut and portal having been completed during the period and preparations well underway to commence the development of the decline.

GGG Resources (LON: GGG 16.75p/£28.59m)
GGG Resources announced its quarterly report for the period ending 31 December 2011. GGG’s merger with Auzex Resources is progressing according to plan with Auzex now waiting for approval from its shareholders and the Court. On 16 December 2011 the Scheme Document for the acquisition of GGG’s entire share capital by Bullabulling Gold was posted to GGG shareholders. The General Meeting of shareholders and Court Meeting were held on 9 January 2012, with approval for the merger from both meetings. On the same day, Auzex’s shareholders approved the demerger of Auzex Exploration (acquiring all the non Bullabulling gold assets of Auzex) from Auzex Resources. On 30 November 2011, the Directors of GGG exercised their warrants thereby increasing the total number of shares in issue to 166.3m. During the quarter, Phase II infill drilling of 425 holes totalling 74.5km was completed. Approximately 99 per cent of drill holes intersected mineralisation with gravity data to be acquired in January expected to help target higher grade mineralisation. In December the Joint Venture announced the initial Scoping Study results at Bullabulling. Highlights included 230,000 ounces of annual gold production, capital costs of A$366m, significant OPEX reduction potential and a 10 year plus mine life. A full pre-feasibility study is underway and expected in the third quarter of 2012.

Goldplat (LON: GDP 14.88p/£24.86m)
Goldplat announced a positive update on its gold mining and recovery operations in Africa. The Company’s Kilimapesa gold mine in Kenya produced and sold its second smelt, a 366 ounce gold doré bar. Production levels at the mine are expected to reach 10,000 ounces by the end of 2012. Gold recovery in South Africa and Ghana has been strong in the year to date and the Company expects a significant increase in operating profit compared to the last half of 2011. In South Africa a high grade mill project has been commissioned to increase milling capacity. Operations in Ghana have seen a significant increase in by-products received and advanced negotiations are underway to acquire further processing by-products for gold recovery from Burkina Faso and Mali. The feasibility of new gold recovery operations in Burkina Faso is also being investigated. Management expects the Company to delineate 1m ounces of gold by the first half of 2012. Additionally, Goldplat announced on 27 January 2012 that 750,000 new shares were issued following the exercise of the same number of options.

K3 Business Technology (LON: KBT 167p/£47.55m)
K3, which supplies and supports Enterprise Resource Planning software to the supply chain industry, announced on 1 December 2011 that it had received an approach from its largest shareholder, Mr P J Claesson, regarding a possible offer to acquire the Company. The Board also announced that it had decided to initiate a strategic review of the options available to the Company and to explore whether a possible offer by Mr Claesson, or any other party, might be in the best interests of the Company and shareholders as a whole. The Company this week updated shareholders  that, following discussions with the Company, Mr Claesson could not agree a proposal for the Company at a level which, in the opinion of the Board (excluding Mr Claesson) properly reflected the underlying value of the Company and its prospects; meanwhile the strategic review is continuing.

Mediwatch (LON: MDW 1.75p/£2.47m)
Developer of medical devices used in the diagnosis of urological disorders and early prostate cancer detection provided a trading update for the year to 31 October 2011 in which it announced whilst it has maintained its turnover and increased profits and cash flows from operations, profit before tax is expected to be materially below market expectations at £322,000 (2010: £233,000). Gross margins have fallen during the period due to increasing costs from suppliers, and whilst there has been a cost reduction programme which has helped the Company, cost cutting in certain research and development projects has encountered delays. There have been some delays in commercialising PSAwatch (a prostate-specific antigen quantitative test), it is going through clinical trials in France to gain reimbursement approval and direct marketing has started in Germany, Hong Kong, Mexico and China, with growing sales already in the UK private sector. Mediwatch also announced this week that it was awarded an NHS supply contract for England and Northern Ireland for the supply of urodynamic disposables, estimated to be worth £250k per annum, and running for two years from April 2012.

Nostra Terra Oil & Gas (LON: NTOG 0.44p/£8.48m)
Nostra Terra, the oil and gas producer with projects in the USA, announced the grant of options to directors over 38,000,000 new ordinary shares representing 1.95 per cent of the current issued share capital, under the authority granted at the Company’s AGM on 30 June 2011. The Options are eligible for exercise until 25 January 2017. The exercise price per share for all Options granted is 0.41p, the closing middle market price of the shares as at 24 January 2012. Separately, Mr. Alden McCall, Chief Operating Officer, has made a purchase of 800,000 Ordinary Shares at a price of 0.41 pence per share and Sir Adrian Blennerhassett, Chairman, has purchased 700,200 Ordinary Shares at 0.414 pence per share.

Oxford Pharmascience (LON: OXP 1.3p/£7.5m)*
The specialty pharmaceutical company that uses advanced pharmaceutic technologies to reformulate medicines announced the appointment of Partner International Incorporated as a business development partner.
Partner International is an established supplier of outsourced corporate and business development services. Under the terms of the appointment, Partner International will focus on accelerating the commercial licensing of Oxford Pharmascience’s OxpZero™ taste masking technology for the ibuprofen sector and other NSAIDs and assist them to identify the next range of API’s with greatest commercial interest for licensing.

PhotonSTAR LED Group (LON: PSL 10.12p/£10m)
The British designer and manufacturer of smart LED lighting solutions has reported a sales growth of 126 per cent to £6.1m in its trading update for the year to December 2011. Gross profit has also risen significantly from £0.83m to £2.2m. At the end of the year, the company had a net cash position of £0.6m, with borrowing facilities of up to £0.35m. The current order book stands at circa £2.4m. The LED Fixtures business continues to show strong growth. As a result, the company has completed its planned expansion of LED fixture production capacity, moving into a newly leased 12,000 sq. ft. facility adjacent to Camtronics Vale’s premises in Tredegar, Wales. This facility has now moved into operation and full production will be transferred from Romsey during January 2012. This will allow the installation of a new production line in Romsey for the full manufacture of ChromaWhite light engine product during Q1. ChromaWhite is the company’s next generation light engine product, which allows microprocessor controlled colour tuning and superior light quality, at an extremely competitive price point. The remainder of the Photonstar Group has been fully rationalised, with the planned closure of the ALC traditional legacy lighting business, and refocusing of the former Enfis specialty LED products on specific niche business applications.

Rock Solid Images (LON: RSI 2.12p/£3.36m)
Rock Solid Images (RSI) announced that the Company had been chosen to provide rock physics-driven reservoir property inversion services to a leading exploration company, in the offshore transform margin of West Africa. The value of the project exceeds US$0.7m and will be completed by mid-year.  The project is a repeat order from an existing client recognizing the value that RSI’s technical services adds to their ongoing E&P successes in the transform margin of West Africa. With a regional knowledge based on rock physics modeling of more than 190 wells and a comprehensive analysis of 40,000 km(2) of seismic data across the entirety of the West African Transform Margin and the conjugate margin of South America, RSI is uniquely positioned to provide alternative technical insights.

SeaEnergy (LON: SEA 28.25p/£19.52m)
Following the disposal of SeaEnergy Renewables Limited in June 2011, the Company has been actively focusing on its core strategy of developing new ventures in the energy sector. It has concluded that the Company should focus on the building and acquiring of complementary service businesses, including the provision of operations and maintenance to offshore wind farms and the vessels from which to provide these services. SeaEnergy believes that the continuing development of this energy services business provides significant prospects for a sustainable and cash generative business model, with potential for the creation of further shareholder value. The Group’s legacy oil and gas assets are not deemed to be core to this business but whilst there remain some near term value accretive opportunities further investments may be made. The Company will seek to realise the value of these holdings in due course. The Company also announced that Steve Remp (the current Executive Chairman) is stepping down from the Board. The Board is well advanced in the process of the selection and recruitment of a new Chief Executive and will make a further announcement when an appointment has been made. Mr Remp is stepping down from the Group he founded in 1977 after a career spanning 34 years in order to concentrate on personal investment activities. Mr Remp will receive £503,000 compensation under his service agreement and will acquire certain non-core group oil & gas interests in Montenegro, with SeaEnergy retaining an upside participation in any future realisations, up to a maximum of $20m. The board will provide shareholders with further details of its strategy for the Company and the results of its considerations on a return of capital to shareholders at its annual results.

Seeing Machines Limited (LON: SEE 2.88p/£11.89m)
A leading developer of facial image processing software for applications that rely on understanding the movement of human faces and eyes yesterday announced the launch of the latest version of its Driver State System (DSS) product. This is in conjunction with the establishment of its Fatigue Consulting Services offering. The hardware platform of DSS Version 3.0 is considerably more ruggedised than previous versions and has been developed based on results from extensive testing and field trials conducted in partnership with global mining companies during the past year. These issues, caused by the extremely unforgiving conditions under which the DSS products operate, had resulted in additional costs to the DSS business resulting from extended trial-periods and roll-outs. The new version addresses these issues and the Company expects to experience an expansion in roll-outs within existing customer operations and faster uptake of the product from the growing pipeline of potential customers. In conjunction with the availability of the new hardware Seeing Machines has also ramped up its DSS service offering such that it now includes 24/7 support and onsite inventory.

Sefton Resources (LON: SER 2.22p/£8.85m)
The oil and gas exploration and production company announced a trading update on 25 January 2012. There was positive news on its two main areas of activity, East Ventura Basin (EVB) in California and Forest City Basin (FCB) in Kansas. At the Tapia oil field in EVB, oil production has started at three wells drilled in the last two months of 2011, with production data to be released in the next month as production rates stabilise. Work overs and the recommencement of cyclic steaming at other wells is expected to further increase production at Tapia. Meanwhile in Kansas the pipeline project remains on track for completion with first gas sales expected by mid-year 2012. A report on Sefton’s interests in Kansas along with an independent estimation of the region’s proven and possible reserves is expected in the first quarter of 2012. In other news, the three directors purchased 7.1m shares at $0.02 per share, increasing their stake in the company up to 10.63 per cent.

Service Power Technologies (LON: SVR 7.5p/£14.21m)
A market leader in outsourced services and field management announced that following a strong performance in the last quarter of the year, it expects results for the year ended 31 December 2011 to be above market expectations. Following the close of its 2011 financial period, ServicePower expects revenue for the year to 31 December 2011 to be approximately £13.2m, a likely EBITDA result of £1.2m and profit before tax of approximately £1.1m. Additionally, the Board expects to report a net cash balance of approximately £5.5m at the year end. Mark Duffin, CEO of ServicePower, commented: “The Company has a healthy pipeline, increasing revenue visibility and a growing core of first class customers. We are confident of our on-going prospects and look forward to updating the market at the time of our full year results, due to be announced in March.”

StatPro (LON: SOG 76p/£46.61m)
AIM listed provider of portfolio analysis and asset pricing services for the global asset management industry, provided a trading update for the year to 31 December 2011. The Company’s portfolio analytics platform, StatPro Revolution, generated an increase in annualised revenue, to £470k for the nine months since launch to the end of the period, with sales across the key territories of the US, UK and Europe, South Africa, Australia and Asia. On the balance sheet, net debt reduced to £3.4m at 31 December 2011 (2010: £5.5m). With a wide variety of clients in diverse segments, the Company has decided to accelerate plans for a cloud technology based environment, which is likely to bring a reduction in operational costs of £1.6m per annum, but after a one-off restructuring cost of £0.8m which will impact the 2012 accounts. Through the uncertainty in global markets, the continuing high renewal rates (92 per cent) will serve the Company well, as will investments in new technology and cloud which will help keep the product range at the cutting edge.

Stellar Diamonds (LON: STEL 6.12p/£13.28m)
The diamond development company focused on West Africa has reported its interim results to December 2011. The main highlight of this period was the completion of resource drilling at the Droujba kimberlite pipe in Guinea and at Tongo Dyke 1 project in Sierra Leone. Bulk sampling has also been completed at Tongo but is ongoing at Droujba to obtain diamond grade and value. The bulk sampling at Tongo Dyke 1 returned a diamond grade of 121cpht (carats per hundred tons)  and diamond value of $185 per carat. The Company remains on track for delivery of independently calculated resource statements at Tongo and Droujba in Q1-12 .

The Management has noted the planned IPO of the Koidu diamond mine on the Hong Kong stock exchange, as this is situated adjacent to the Kono project and will help raise awareness of the potential value within its Kono permits.

TEG Group (LON: TEG 8.5p/£9.98m)
Following the announcement on 23 January by TEG, the green technology company which develops and operates organic composting and energy plants, regarding its share price movement, the Company announced last week that the Board has received a significant number of preliminary expressions of interest from potential purchasers. As a result the Board has decided it should conduct a formal sale process in order to explore these and any further potential expressions of interest alongside the alternative strategic options including investment at the operating company and project level and is in discussion with other potential investors. The Board explained that whilst it firmly believes that the Company has a secure future as an independent business; it recognises that there is potential interest from organisations that could help the business by providing investment to strengthen the Company’s balance sheet and provide assistance to secure future projects. They believe that this support could significantly accelerate the Company’s growth to take advantage of the opportunities in the waste market.

Triple Plate Junction (LON: TPJ 4.6p/£16.02m)
Triple Plate Junction announced last week that it had notified Gold Anomaly Limited, its joint venture partner in the Crater Mountain project
that it has elected not to participate in the future funding of its pro rata share of the Crater Mountain Project. As a result, the 20 per cent. interest that the Company and Celtic Minerals Ltd together held in the Crater Mountain Project, will reduce to a combined undilutable interest of 10 per cent. which will be carried through to the completion of a bankable feasibility study without needing any future contribution to the project until that advanced stage.  The Company reached this decision based on the results from Gold Anomaly’s recent drilling programme which whilst encouraging in terms of potential for the discovery of a large low-grade gold deposit, do not provide new data that would change the Company’s view that the results are not sufficient to justify the Company contributing the amounts of money needed to fund the future drilling programme. It also announced in respect of the Company’s dispute with Celtic over their respective shares in the 20 per cent interest in the Crater Mountain Project, that it had reached agreement to settle the dispute subject to documentation being finalised.

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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.

17 January 2012

This week: Music to the ears of Symphony, accumulating orders for Accumuli and blooming great update from BMY.

Another week of ups and downs, with the FTSE closing some 30 points lower at 5,635 points and the AIM All Share closing 15 points higher at 735 points. Falling inflation figures seemed to be the key theme this week- the UK announced this week a fall to 4.2 per cent in December from 4.8 per cent in November, Eurozone inflation dropped to 2.7 per cent and inflation in India dropped to 7.5 per cent. China also has a difficult end of year since grew at its slowest pace in more than two years. The week ahead sees unemployment and average earnings data, the Nationwide Consumer Confidence index and retail sales data in the UK.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ABC trading update, ACM Order for DDI equipment, ALO Drilling Update, APH Trading Update, AYM Operational Update, BVM trading update, BEM Reindeer Herding, BIOM £2m Contract, BMY interim reports, CAU Interims trading update, CSLT Final Curtain, CYAN Order win, FBT Trading Update, GLR Glenover Update, GGG Drilling update, HYR Trading Update, IDH New Finance Director, JUB Spudding of fifth well in Kharsang, LKI Acquisition, MTV Trading Update, OMI Pantanillo PEA, POS Placing & Maersk Funding, RENE New data on lead stem cell, RKH Press Speculation, SLE Tarfaya Oil Shale Update, SYM Trading Update, SYNC Trading Update, TYR Trading update, VCP Shareholder activism, and WAFM Re-admission to AIM.

Abcam (LON:ABC 341p/£625.86m)
Abcam, a global leader in the supply of protein research tools, last week announced a trading update ahead of its results for the six months ended 31 December 2011. The Company reported that its business is performing well, driven by its strategy of providing a broadening range of high quality products and support to the global protein research community. Revenues for the six months to December 2011 increased by approximately 13.5 per cent compared with the corresponding period in the 2011 financial year. Continued tight cost control and some exchange rate benefit has enabled the Company to improve both gross and operating margins (before the acquisition costs of Ascent Scientific and the amortisation of acquisition related intangible assets). Consequently the Board reported that the Company continues on track to meet its profit expectations for the full year.

Accumuli (LON:ACM 12.38p/£17.5m)
The IT security services provider has reported that its subsidiary, Accumuli Security, has secured an order worth £0.8m for DDI equipment with a global financial institution. DDI is an industry term used to describe collectively the three core network services – DNS, DHCP and IPAM. This order is in addition to the current services provided to this existing customer, and will sit at the core of the customer’s network, with the aim of significantly improve functionality, resilience and security.

Alecto Minerals (LON:ALO 1.62p/£3.17m)
Alecto Minerals, the AIM listed exploration and development company with gold and base metal projects in Ethiopia and Mauritania, last week announced that it has finalised the design of its Mauritanian scout drilling programme, comprising of 12 holes, focussed primarily on targeting Iron Oxide Copper Gold (IOCG) mineralisation at its 615 sq km Wad Amour licence located in the prospective Mauritanide mobile belt of Mauritania.  The Company considers that the Wad Amour licence has the potential to host significant copper/gold occurrences similar to First Quantum Mineral Limited’s Guelb Moghrein IOCG deposit.

Alliance Pharma (LON:APH 31.75p/£76.01m)
The specialty pharma company provided a pre close trading update for the year ending 31 December 2011. In line with market expectations, turnover is expected to be in the region of £46m for the period, with sales of the Company’s Hydromol and ImmuCyst products continuing to grow well. Deltacortril however saw increased competition during the period and in particular by the market’s move towards uncoated tablets, with sales for the period of £4.7m. Nu-Seals sales were up 14 per cent on the prior year, but there is a cautious outlook for the year ahead given the Irish government is looking at measures to reduce its spend on medications. The Company believes that cost saving and efficiency measures that are being implemented, together with acquisitions made during the period (Quinoderm™, Ceanel™, Anbesol™, Ashton & Parsons™ and 6 products from Beacon Pharmaceuticals), should help counter some of the tough trading conditions out there.

Anglesey Mining (LON:AYM 28.5p/£45.08m)
Iron ore miner Anglesey announced that it has recommenced diamond drilling at Parys Mountain (100 per cent owned by Anglesey) which is a copper-zinc-lead project with historical resources currently in excess of 7 million tonnes at over 9 per cent combined metal. The initial stage of the drill programme is for the drilling of four holes, the first of which has commenced and has a target depth of 220-250 metres, and in total all four will provide a depth of 800 metres. The programme is designed to identify the extent of near surface locations of the Engine Zone mineralisation. A further 6 to 8 holes may be drilled depending on initial results, and the results are expected to contribute to an overall review of the mining and production options for the Company. Anglesey also provided preliminary operating results for the 33 per cent owned James direct shipping (DSO) iron ore project near Schefferville, Quebec (through Labrador Iron Mines Holdings Limited). A total of 1.2m tonnes of ore was mined and trucked to the Silver Yards area ahead of processing or transport to Port to the end of December 2011, with 599,467 wet tonnes being hauled to the Port of Sept-Iles, and of which 411,987 wet tonnes were sold to Iron Ore Company (IOC) and shipped to China. Planned total ore mined is expected to be between 2.5 to 3.0m tonnes in calendar year 2012.

Belgravium (LON: BVM 5.75p/£5.80m)
Belgravium Technologies, the specialist IT provider for the supply chain sector, finished 2011 strongly with greater trading in the second half than the first, thereby meeting market expectations for the year. Trading in Belgravium’s major markets of logistics, transportation and on-board retail has been satisfactory with on-board retail being particularly strong. The second half saw the completion of the Monarch Airlines contract and a contract win for another major airline. Another significant contract was completed in the second half with the supply of over 600 units of Belgravium’s “Atlanta 5000” terminals to Hermes, the UK’s largest home delivery courier. These contracts provide annual revenue streams through software licensing and servicing fees.

Beowulf Mining (LON:BEM 12.25p/£25.78m)
Beowulf the mineral exploration company, which owns several exploration projects in Sweden, noted that whilst the relevant landowners have consented, objections have been raised by the local Saami community who are seeking to delay the Company’s new drilling campaign to May 2012 due to seasonal reindeer herding. Accordingly, drilling operations at both Kallak North and Kallak South will remain suspended pending completion of the Company’s ongoing consultation process with the local Saami community and the Mining Inspector seeking to resolve the objections that have been raised. The Company also announced that the resolutions proposed at the General Meeting held on Friday 13 January 2012, were all duly approved by shareholders.

Biome Technologies (LON:BIOM 0.16p/£9.12m)
Biome Technologies announced that its Stanelco RF Technologies division has signed a contract with Durapipe UK to develop a new and innovative portable induction welding system. This new and innovative portable welding device will work with Durapipe’s new plastic pipe system which contains a steel layer and consequently allows induction heating technology to be used. The welding equipment, developed by Stanelco RF, will allow installers in the field to join pipes and fittings quickly, cleanly and without the use of adhesives. The development contract is expected to lead to a multi-year manufacture and supply contract with Stanelco RF Technologies with first deliveries of the equipment expected to commence in early 2013. Biome Technologies anticipates this project will generate revenues in excess of £2m over a three to four year period.

Bloomsbury Publishing (LON:BMY 99p/£73.44m)
The publishing group, Bloomsbury, experienced a strong period from 1 September 2011 to 31 December 2011 with contributions coming from a wide variety of titles in both digital and print. In particular, eBook sales saw a significant gain of 38 per cent year on year. Significant revenues for the period were generated from the intellectual property and publishing services projects. In October they announced a long term licensing deal for the Wisden brand in India generating US$3.2m over five years plus royalties. In December, a partnership was formed with Forschungsinstitut zur Zukunft der Arbeit GmbH, a private independent non-profit research institute in Germany, which will generate £4.3m of revenue over five years. Bloomsbury is focused on maximising the enormous opportunities provided by the rise in digital publishing. The company launched an online service for UK tax practitioners in October and a new online magazine Wisden Extra.  In December they announced that Public Library Online, the online subscription service for libraries, will be making two shelves available free throughout the UK following generous sponsorship from Google. Additionally, Bloomsbury acquired Absolute Press, a high quality cookery list, which includes bestsellers Indian Superfood and Cooking with Kids. Rebecca McNally was appointed as a new Publishing Director and International Editor in Chief of Children’s Books in October to aid expansion of Bloomsbury’s illustrated children’s publishing. Although, returns from the post Christmas period have not yet been realised, the Company did have net cash of £7m as of 31 December 2011.

Centaur Media (LON:CAU 35.25p/£50m)
The business information and events company is expected to report underlying year-on-year revenue growth of 4 per cent in the six months to December 2011. Digital revenues continued to be the primary driver of growth, while print revenues were broadly flat. In the same period, EBITDA margins increased from 4.5 per cent to 6.5 per cent reflecting the benefits of restructuring and the impact of the disposals completed. The company also completed two acquisitions, of IPL and VBR, in the first half of the financial year for a total initial consideration of £4.3m. Taking both these transactions into account, net debt at 31 December was £5.5m. Centaur’s earnings and cash flows are heavily weighted towards the second half of the financial year and the management expects to be cash positive by 30 June 2012.

Cosalt (LON:CSLT 0.3p/£1.21m)
Further to Oval Limited’s offer for the issued share capital of Cosalt being declared wholly unconditional on 9 January 2012, the board of Cosalt confirms that it has agreed revised arrangements for the provision of borrowing facilities to the Company by Oval. The board also confirms that, Ken Murray, Maurice White and Yarom Ophir resigned as non-executive directors with effect from 9 January 2011. The board now comprises David Ross, Non-executive Chairman and Trevor Sands, Chief Executive Officer.

Cyan Holdings (LON:CYAN 0.44p/£7.15m)
Cyan Holdings, the integrated system design company delivering mesh based flexible wireless solutions for lighting control, utility metering and industrial telemetry, announces that it has received a new lighting order taking the total to more than 40 active lighting customers and prospects in China. The new lighting order is for an initial 5,000 units for a total requirement of 160,000 lamps. Amongst Cyan’s expanding base of existing and prospective customers, a number have recently completed trials, and Cyan now expects significant orders as a result. Two further companies have indicated that they expect to be placing orders for a combined 25,000 units after the Chinese New Year. The organisations that have recently seen Cyan’s product are planning to start trials and a number of Chinese organisations are currently conducting trials overseas in new territories, such as Mexico. The Board is encouraged that it has a popular, high quality and reliable lighting product that is rapidly gaining traction in China, and Chinese companies are successfully promoting lighting products incorporating Cyan lighting control products in other countries.

Forbidden Technologies (LON:FBT 36p/£31.17m)
Forbidden Technologies, the developer of a Cloud video platform for the social media world, provided a trading update for the year ended 31 December 2011. Operating in four segments, the Company has made good progress with double digit percentage sales growth and an expansion in the visible sales pipeline for 2012. In Episodic Television, the Company is scaling up by signing up Post Houses to act as channels to market, making FORscene available to their production company clients- H1 2011 sales in broadcast post increased by 94 per cent and continued to increase through the year. Real Time use, including news and sport, has seen major partners signed for both in 2011, whilst Large Scale Video Systems (as delivered by Systems Integrators) although seeing slower progress than expected has large potential scale at marginal cost to the Company. A fourth segment, Video for the Consumer and the Social Media World, is expected to make progress through the Canadian distributor, Formidable Technologies (though this has not come through in results yet). In December, the Company announced an important licensing deal with YouTube, which is expected to make a significant contribution to the results for 2012 and creates a good opportunity ahead.

Galileo (LON:GLR 40p/£30.22m)
The Board of Galileo Resources, the emerging African Rare Earth exploration company, announced further positive drilling results from the latest two boreholes GVH005 and GVH006 drilled on its Glenover Rare Earths Joint Venture project, north of Thabazimbi, in the Limpopo Province of South Africa. The results confirm the good REO mineralisation reported in November & December for the project’s first four boreholes.  A further 15 boreholes (GVH007 to GVH021) have been drilled – around the old open pit – which completes the drilling programme. Six of the 15 boreholes have been logged and samples sent for analysis.

GGG Resources (LON:GGG 11p/£18.29m)
GGG Resources last week reported that it and its partner have completed the Phase II infilling drill programme at the Bullabulling gold project near Kalgoorlie in the eastern goldfields of Western Australia. The Phase II drill programme commenced on May 14 and was completed on schedule on 18 December 2011. Under Phase II, a total of 425 holes were drilled for a total of 74,452m.The Joint Venture now awaits the results from the assays which are expected in between four to six weeks’ time.

Hydrodec (LON:HYR 9.62p/£39.48m)
Hydrodec, the oil recycling specialist, provided a trading update for the year ending 31 December 2011, in which it announced that it expected revenue for 2011 to be significantly higher than that of 2010 based on the higher margins and pricing resulting from a diversification of its customer base and improved feedstock supplies. Sales of the Superfine Oils in the second half increased by 15 per cent to 10.9m litres, leading to full year volumes of 20.3m litres (2010: 20.2m litres). Further, the Company has received a draft of the approval from the US Environmental Protection Agency (EPA) to treat polychlorinated biphenyl (PCB) contaminated used oil with completion expected by the middle of the year and enabling Hydrodec to offer suppliers a “one-stop shop” and environmentally-friendly solution for their used transformer oil. A good update for the Company and we look forward optimistically to seeing the full final year results.

ImmunoDiagnostic Systems (LON:IDH 420p/£119.29m)
ImmunoDiagnostic Systems, a leading producer of diagnostic testing kits and automated systems for the clinical and research markets, this week announced the appointment of Gerard Murray as Finance Director of the Company with effect from 1 April 2012. This follows on from Paul Hailes’s decision to stand down on 31 March 2012 and his move within the Group to its North American operations. Late last year the Company reported positive interims for the 6 months to September 2011 (revenue was up 21 per cent, and pre tax profit up by 17 per cent), though it also saw that the impending introduction of competing automated products was coinciding with efforts to contain health budgets, particularly in the US- increasing pricing pressure and some disruption to equipment ordering patterns were taking place. Despite this the Company continues to believe overall prospects are good and the appointment of Gerard Murray, together the internal move of Paul Hailes demonstrates the structural strengthening that is taking place to help bolster the Company.

Jubilant Energy (LON:JUB 28.75p/£120m)
The oil & gas exploration and production has announced that KPL-F, the fifth of the seven development wells of the Phase III drilling campaign in the oil producing Kharsang field in the Indian state of Arunachal Pradesh was spudded on 13 January. KPL-F is being drilled to appraise the oil bearing sands. This follows the spudding of the fourth development well (KPL-H), which was successfully drilled to a True Vertical Depth (TVD) of 1,066 metres; a number of sands have been encountered. Jubilant owns a 25 percent in the block through its subsidiary, Jubilant Energy (Kharsang) Pvt. Ltd, in a consortium with Oil India and GeoPetrol.

Landkom International (LON:LKI 2.62p/£11.42m)
The AIM listed Ukrainian producer of agriculture commodities provided an update to shareholders on the recommended acquisition by Alpcot Agro AB. Alpcot shareholders approved the acquisition and authorised the issue of new shares and other matters at an Extraordinary General Meeting in Stockholm, which the Landkom Board believes will now secure a transaction by the end of January and recommends its own shareholders to vote in favour of the acquisition.

Motive TV (LON:MTV 0.14p/£3.84m)
MTV provided a trading update for the year ended 31 December 2011 in which they announced that they expect the results to be broadly in line with market expectations. Though the Company provided no numerical expectations, it has gained some success in gaining recognition of its product range in the video industry in both Europe and the Americas. A number of pilots, market tests and technical trials are underway or starting in Q1 2012, and whilst Europe remains sluggish due to the financial crisis, the Company is confident about closing sales that have already commenced. Further the Company continues to explore opportunities in Asia and South America- markets which it feels have been somewhat insulated from the downturn. Last week, the Company also announced the granting of 3 grants totalling £205,000 towards the costs of three sports documentaries for Setanta Sports, and also announced that it had signed an agreement with Digital Media Europe Ltd to pursue opportunities in the licensing and deployment of Motive’s Video2Go technology (designed to enable brand owners to deliver self-created, self-owned, advertising based content direct to a customers’ mobile device in vertical markets outside the television industry) in markets outside the television industry.

Orasur (LON:OMI 57p/£44.45m)
Orosur Mining Inc. the South American-focused gold producer and explorer announced the results of the Preliminary Economic Assessment (PEA) on its wholly owned Pantanillo Norte project in Chile. The study was completed by AMEC E&C Services Inc. and compliant with NI 43-101 regulations. The Technical Report discloses a Mineral Resource estimate for the Project, which supported a Preliminary Economic Assessment. The financial results indicated a five-year mine life, with Net Present Value of US$32m (before tax) and IRR of 17per cent. The gold price assumption for the PEA was constant at US$ 1,200/oz. and no other metals were considered payable. Meanwhile the company announced that 2012 production is expected to be on target at 57,500 to 60,000 ounces despite a delay in receiving permits to commence production from Arenal Deeps. This has affected production for the last quarter, though excellent progress is now being made. And finally a management re-shuffle; Mario Caron is to step down from his role as Chairman to spend more time on his role as CEO of Aldridge Minerals, though he will remain a non-exec; whilst Ralph Browning will relinquish his non-exec role to become Executive Chairman.

Plexus Holdings (LON:POS 88.5p/£70.96m)
Plexus Holdings, the oil and gas engineering services business announced that it has conducted a placing at a price of 78p per share, with an aggregate value of approximately £6.2m before expenses. The Company also announced that it has received £260,000 funding from Maersk Oil North Sea UK Limited towards the Company’s 20,000 psi High Pressure/ High Temperature (‘HP/HT’) Mudline Tieback wellhead system Joint Industry Project (‘JIP’) development programme. Testing and manufacturing of the prototype is underway with assembly scheduled for the third quarter of this financial year, and final deployment and commercialisation is targeted for mid-2012. The Tieback system design, will allow HP/HT exploration wells and pre-drilled production wells to be converted into either subsea or platform producing wells. These wells, which have an estimated cost of between £50m and £300m, are currently abandoned after drilling and to date there is no other technology in the market which can ‘save’ or ‘convert’ such wells. In addition, the HP/HT Mudline Tieback technology has the potential to shorten the development cycle of an oil and gas field by several years and in turn provide further substantial financial benefits, as it would allow the pre-drilling of production wells to commence before a production platform is put in place. Plexus’ Chairman Robert Adair has notified the Company that he will be retiring as a Director and Chairman with effect from no later than 30 June 2012, and is therefore now selling his interests in Plexus totalling 3,505,425 Existing Ordinary Shares as part of the Placing. Shareholders should note that the process to select and appoint a new Chairman is underway and the Board expects to announce further details in due course.

ReNeuron Group (LON:RENE 5.85p/£36m)
The clinical-stage stem cell company has announced that its academic collaborators have new data regarding the stability of its lead CTX stem cell line in large-scale manufacturing conditions. The first clinical application for the CTX cell line is ReNeuron’s ReN001 stem cell therapy for disabled stroke patients, currently in Phase I clinical development. The results was presented by Professor Mike Hoare, co-Director of The Advanced Centre for Biochemical Engineering at University College London (UCL), at the Scale-Up and Manufacturing of Cell-Based Therapies conference in San Diego, US, earlier this month. The UCL team conducted studies with a number of cell candidates, including ReNeuron’s CTX cell line. The results show that the CTX cells retained their morphology and growth characteristics when exposed to the levels of shear and centrifugal stresses that could be experienced in future large-scale manufacture of the cells for widespread clinical use.

Rockhopper Exploration (LON:RKH 275p/£781.43m)
Rockhopper Exploration, the North Falkland Basin oil and gas exploration company, was the subject of weekend press rumours that the company is in talks with oil and gas giants Cairn Energy (LON:CNE 291.4p/£4,101.75m). The Sunday Times newspaper, which did not cite sources, suggested that Cairn is considering a move into the Falklands area which could involve a partnership with or the acquisition of Rockhopper.   Cairn is sitting on a US$1.4bn (£0.9bn) cash pile since selling its 40 per cent stake in Cairn India to Vedanta Resources (LON:VED 1,085p/£3,221.45m). Interest in the Falklands has heightened since Rockhopper’s successful development of its Sea Lion complex there.

San Leon Energy (LON:SLE 9.65p/£107m)
The exploration and production company has established connectivity between its two test wells in its Tarfaya Oil Shale project in Morocco.  Injection water has been observed in three wells, including pilot Well A and Well B drilled by the company as part of the pilot project, and the pre-existing Star 12 core hole. Based on these results, San Leon will now identify an alternative drilling site away from existing wells to test the extent of the play and the associated water acquirers. The company has been contacted by several companies with oil shale experience regarding partnering on the Tarfaya Oil Shale project.

Symphony Environment (LON:SYM 5.25p/£6.71m)
Symphony picks up tempo in the fourth movement. The specialist advanced plastics technologies’ company provided a trading update for the 12 months ending 31 December 2011. Revenues for the period to 31 December 2011 are expected to be in line with the prior year (2010: £8.5m), with volumes of the main product d2w, growing by approximately 10 per cent despite some reductions in the European markets. Finished products sales continue to decrease as planned, as the sales effort focused on d2w, d2p and d2detector product lines. Sales in the final quarter were strong as global demand outside of Europe started to pickup following a quieter period of consolidation. In several territories sales were unexpectedly delayed due to initiation issues which now appear to be resolving. Their main contracts remain secure for 2012 with indications for potential for further growth. They also have a number of important product trials in place, and negotiations are ongoing with several firms. The markets for their brands are indicating strong potential demand as a result of some positive changes in legislation, as well as more corporate interest in environmental, sustainability and health issues.

Synchronica (LON:SYNC 12.25p/£19.44m)
Synchronica, the international provider of next-generation mobile messaging services, gave a trading update for the year ended 31 December 2011. They expect to report full year 2011 revenues of approximately US$23m, which is marginally ahead of market expectations, and represents an increase of 111 per cent when compared to the same period in 2010 (FY 2010: US$10.9m). They also announced that, according to unaudited data from its internal management reports, the Company was profitable at the EBITDA level for the months of November and December 2011, subsequent to the significant cost-reduction initiatives recently implemented. It is expected that full audited results will be released to the market during March 2012.

TyraTech (LON:TYR 20p/£10.25m)
TyraTech, Inc., a natural life sciences company, last week provided a trading update to its shareholders. Terminix, the Company’s primary commercial partner in the North American insect control market, has recently informed the Company that it is currently in the process of re-calibrating its product strategy and that is has suspended distribution of the Company’s SafeShield product to its customer base. The Company has been informed that this was not a product performance-related decision. As a result of these unexpected developments, the Company now estimates its total revenues for the year ending 31 December 2011 to be approximately US$7.0m and its year-end cash position to be US$0.8m. However, the Company continues to expect pre-tax losses to be approximately US$2.8m in line with market expectations. The Company expects that these events will also impact its 2012 revenue and operating results and at this time is seeking greater clarity from Terminix as to the likely demand for future orders. As a result of the shift in demand which has occurred with Terminix, the Directors have determined that the Company will require additional funding in order to adequately capitalise the business.

Victoria Plc (LON:VCP 340p/£23.61m)
Victoria, a leading quality flooring supplier in the UK and Australasia, has become the subject of a very public battle between management and rebel shareholders. The Company declined the request of certain shareholders to change the non-executive directors and announced last week that it had put itself up for sale. The rebel shareholders, led by Alexander Anton and New Fortress Finance then issued a formal demand to the Company requiring it to convene a general meeting to replace the board adding it “was very concerned that the request to our response has been to put the company for sale”. The Company then responded yesterday challenging the validity of the requisition to require the convening of the general meeting. The rebel shareholders assert that they speak for approximately 46 per cent. of the issued share capital so this dispute looks set to run.

West African Minerals Corporation (LON:WAFM 15.5p/ £29.12m)
West African Minerals (formerly called  Emerging Metals Limited) last week re-commenced trading on AIM following completion of its reverse take-over of Ferrum, an iron ore exploration company with licences in a number of West African countries including Cameroon and Sierra Leone. At the same time as the acquisition the Company raised approximately £3.25m (before expenses) to fund the exploration of the ferrum assets and provide additional working capital for the enlarged group. Stephen Dattels, the executive co-chairman, commented that the proximity of Ferrum’s assets to advanced iron ore projects makes them well positioned to contain mineralisation, as well as benefit from the infrastructure being developed in the region.

*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 January 2012

The Small Cap Wrap team is back after the festive break, and wishes all its readers a Happy New Year.
This week: More from Encore, no sweet music from HMV and William Sinclair’s good growth

Anglesey Mining (AYM 58p / £88.83m)
Anglesey’s directors have exercised 2,500,000 share options at an average price of 7.2p per share and have immediately sold them on to Gartmore Investment and another unnamed institution for 56p per share.  In addition, the company has raised £1.4 million by placing another 2,500,000 new shares at 56p per share to the same investors.  The funds will be used for working capital purposes.

Avacta (AVCT 1.24P / £17.81m)
Provider of high value technologies and services to the pharmaceutical and diagnostics markets announced that it made its first sale and installation of the Optim system to the US, which is the biggest market for the product. Optim is designed to accelerate and reduce the cost of drug development through early stage analysis of drug compounds, which helps identify the best candidate drug compounds for development and optimum processing conditions. Optim is capable of delivering such information at least 10 times faster than any other approach, whilst the single-use sample holder feature of the product is expected to lead to significant recurring consumable revenues. In November last year the Company announced very positive final results for the period to 31 July 2010. With news of sales to the US market and the Company’s results, 2011 could be very interesting indeed for Avacta.

Bahamas Petroleum (BPC 13p / £128.36m)
Following up on last year’s seismic data indicating the potential of super-giant traps of hydrocarbons on the Company’s licences in The Bahamas, the Company has engaged Osprey Navigation to perform a close grid 2D seismic survey in order to define drillable targets and resource potential in place.

Beowulf Mining (BEM 41.75p / £66.72m)
In October 2010 we wrote on the commencement of a drilling programme for Beowulf’s wholly owned Kallak South iron deposit, and subsequent to this the Company has announced drilling results which confirm the presence of an estimated 400 million metric tonnes of iron ore of similar type and quality to that encountered at the Kallak North deposits. An international consultancy group has started work to complete an independent JORC compliant resource estimate for the Kallak North deposit schedule to be completed in late Q1 2011. Preliminary results indicate the presence of more that 175 million tonnes of iron ore, however significant additional tonnages of iron ore are anticipated from planned future drilling as its total extension is not currently defined. Both deposits at Kallak are estimated to contain more than 600 million tonnes of high quality iron ore. These latest drilling results clearly demonstrate Kallak’s considerable potential worthwhile for investment.

Cove Energy (COV 97.25p / £477.49m)
Cove Energy, the East African oil and gas exploration company announced (just before Christmas) that the Bedford Dolphin drillship has arrived on location at the Tubarao well site and said that drilling is expected to take 6 to 8 weeks. We mentioned in the Small Cap Wrap of 30th November 2010 that gas had been discovered on the Lagosta prospect and this drillship has been moved following cessation of operations on that discovery which has been suspended to allow for future flow testing.
John Craven, CEO of Cove Energy said “Cove is excited by the continuous exploration and appraisal programme planned for 2011 and beyond…….and we look forward to announcing results (from Tubarao) as and when appropriate”.

Encore Oil (EO. 136.5p / £398.91m)
Encore reported that it had successfully drilled the Varadero exploration well to a total of 5,205 feet measured depth, having encountered excellent quality hydrocarbon bearing reservoir sandstones at 4,020 feet of measured depth. Initial analysis indicated the discovery of a 400 feet hydrocarbon bearing interval with a calculated net pay of 106 feet, and analysis of logs from the wireline sampling has revealed sands with porosities of 33 per cent and of excellent quality.
Alan Booth, EnCore’s Chief Executive Officer, commented: “This is an excellent result at Varadero which further supports our view that Block 28/9 likely contains a series of accumulations in Tay “injectite” sands. We are becoming increasingly confident that the seismic data directly highlights the presence of high quality injectite reservoirs in Block 28/9 which, to date have all proven to be hydrocarbon bearing.”
The well will now be plugged and abandoned, with the Galaxy II rig now being moved to the Burgman prospect. This is excellent news, and the Company continues to demonstrate its active approach to drilling.

Enegi Oil (ENEG 21.5p / £18.88m)
Enegi Oil, a western Newfoundland focused oil and gas company announced that, for the year ended June 30, it made a narrowed pretax loss of £1.3m (against a loss of £17.2m in FY2009) on revenue unchanged at £0.1m.The decrease in losses in 2010 is due to two main factors: In 2009, as a result of the poor outcome from drilling activities, the Group took an impairment charge of £13.35m on its fixed assets and no impairment was deemed necessary in 2010.The Group’s operating subsidiary, PDIP Production Inc, realised discounts of £874,000 upon satisfaction of a number of its creditor arrangements.
The Company raised £2.9m during the period through the placing of shares in September and December 2009 at 5p and 10p respectively.

Forte Energy (FTE 8.56p / £49.88m)
The uranium and rare earth metals company has released additional assay results from drill holes at the Company’s uranium project in Mauritania.  So far, 27 holes out of 120 drilled have been processed enabling the Company to start a more detailed geological interpretation of the project’s geology.  Moving forward, a more detailed study of the origins of the high grade core will be undertaken as part of the resource modelling process once all assays are received.

Frontera Resources Corporation (FRR 5.62p / £7.61m)
The oil and gas exploration company operating in emerging markets has obtained a one-year revolving credit facility of up to $2 million in a related party transaction.  The funds will be used for ongoing operational and working capital requirements.  Frontera is applying modern production methods to old productive fields with extensive potential currently at the Shallow Fields Production Unit on Block 12 in the country of Georgia.

Frontier Mining (FML 7.75p / £143.98m)
In our last Small Cap Wrap we reported on Frontier’s round of fundraising through the issuance of ordinary shares regarding the proposed acquisition of the Benkala Copper Deposit in northern Kazakhstan currently under development and the Maminskoye Gold Deposit in the southern Ural region of Russia. On the 31 December 2010 the company continued fundraising by issuing 873,215,000 new ordinary shares or 47 per cent of the enlarged issued share capital of Frontier. However the transfer of title of the remaining 50 per cent interest in the US Megatech BVI, which owns the Benkala Copper Project, currently held by Coville to Frontier is subject to receipt of consent to the transaction from the Kazakhstan Ministry of Industry and New Technology (MINT). Frontier has taken legal charges over all the outstanding shares of US Megatech BVI. Once the consent for the acquisition has been received from MINT, both projects will be owned 100 per cent by Frontier. It is worth keeping a close eye on Frontier’s merger with US Megatech BVI. A predicted bullish market in copper for 2011 will offer enormous opportunities for investment.

Herencia Resources (HER 3.7p / £46.20m)
Herencia will commence a 15,000 meter diamond drilling programme at the Paguanta zinc-lead-silver-gold project in Northern Chile in the last week of February.  While initially targeting the high copper and silver grades at the Doris prospect, work will follow on targeting the porphyry-copper potential at the La Rosa prospect and subsequently by in-fill drilling of the Patricia mineral resource in order to upgrade the inferred mineral resource estimate.

HMV (HMV 25p / £105.90m)
This is the first time we write on HMV, the retailer of pre-recorded music, video, electronic games and related entertainment products. The Company provided an interim management statement covering the Christmas sales period, which brought news of a planned closure to 60 of the Company’s stores following a disappointing sales period- an 11.9 per cent fall in the 5 weeks to January 2011 for the UK market and 10.2 per cent for the overseas market. Management seems to place much of the disappointing results on the poor weather together with the already challenging industry conditions in which HMV operates- both reasonable rationale, but store closures suggest a heavier weighting with the challenging industry conditions and the underlying troubles currently faced by the group.
Whilst sales at Waterstones (part of the HMV Group) have improved, the Company expects its full year earnings to come in at the lower end of market expectations, which currently range from £45m to £60m – expectations with which we agree, and perhaps the markets too, with the Company’s share price closing 19 per cent lower on the day that the interim statement was made.

Matra Petroleum (MTA 4.05p / £43.13m)
The Russian oil and gas exploration and production company has been awarded a 20 year production licence for the Sokolovskoe field in the Orenburg Oblast.

Max Petroleum (MXP 21.25p / £96.04m)
Max Petroleum, focused on Kazakhstan has updated the market on its activities in the Blocks A&E Licence area, stating that initial test results from the Cretaceous reservoir in the UTS-1 discovery well indicate a 55 metre oil column with 31 metres of net oil pay. Perforations at depths ranging from 120 to 128 metres and 155 to 158 metres produced 26 degree API gravity crude oil on pump at indicative rates of approximately 24 barrels of oil per day during a brief clean up period. The duration of the test was limited due to government regulations and the well will be placed on a 90-day long term production test after all the necessary government approvals are obtained in the next few weeks. Based on a probable oil/water contact at 161 metres as indicated by revised petrophysical analysis and current mapping, the potential oil in place for the reservoir is estimated to be between 85 and 135 million barrels of oil. Other, similar fields in the Pre-Caspian basin report recovery factors between 20 to 30 per cent of original oil in place. Long-term testing and pressure analysis combined with confirmation drilling and a new seismic survey focused on these shallow reservoirs will be needed to more accurately define recoverable oil reserves. Enhanced recovery techniques, such as water flooding, may also be needed to improve recovery from such shallow depths with low reservoir pressure. A full update will be made as soon as testing is complete, which is expected in the next several weeks.

Motive Television (MTV 1.02p / £12.37m)
The digital television technology, software and services provider yesterday announced that it has successfully enabled the broadcasting of 3D television content to a set-top box using its Bestv software over the digital terrestrial television (DTT) transmission system. The service, called “3VOD” by Motive, has been successfully deployed by Italian broadcaster Mediaset in Italy, demonstrating the versatility and utility of the Bestv software for DTT broadcasters. So far, 3D broadcasting has only been available in high-bandwidth pay-tv on satellite and cable platforms. Now, using Bestv, terrestrial broadcasters can make the jump to value-added premium services. Since we last wrote on this Company in mid December, the share price has put on 0.2 pence per share.  The Board is confident that its disruptive technologies position Motive as a solution provider that can offer TV Anywhere, anytime to the industry.

Nostra Terra Oil and Gas Group (NOTG 0.345p / £5.35m)
NTOG has announced that it has signed an agreement with Houston-based New Century Exploration Inc to acquire a 1 per cent APO (after payout) working interest in the Vintage Hills prospect unit in Brazos County, Texas, within the established Giddings field. Development will initially target the prolific Austin Chalk which has shown to be divided into four separate horizontal reservoirs, with no vertical communication. The only vertical well drilled on the prospect (Agnello No1) produced modest amounts of oil and gas but, more importantly, proved all four of the Austin Chalk zones to be oil-bearing. The Agnello No2 well was drilled horizontally and produced over 190,000 barrels of oil and 1.2 billion cubic feet of gas from one of the zones, known as Middle B. A horizontal well will be drilled into the Upper B reservoir later this month, followed later by the Lower B and A zones. The Vintage Hills prospect is in line with the strategy of securing interests in relatively low-risk, high return and rapid payout assets in established producing areas of the U.S.

Plethora Solutions Holdings (PLE 8.88p / £4.82m)*
Plethora Solutions, the specialty pharmaceutical company, has seen share price weakness of late on the back of a tip sheet SELL which doesn’t appear to give the full picture in our opinion.  The full picture and recent news from PLE states that two further products were launched before the year-end in The Urology Company, bringing the number of product launched to 11 for the year, ahead of the Company’s original target of 6 to 9. The Urology Company was set up to provide a financial balance to the intermittent but substantial income from milestone and royalty streams generated from partnered development assets. The most advanced projects in Plethora’s development portfolio are now embedded with partners. PSD502, for the treatment of premature ejaculation, has completed its clinical development and is now controlled by Shionogi. PSD503, a potential treatment for stress urinary incontinence, is under option to a major global pharmaceutical company. We like the highly derisked model: speciality pharma products selling on the market coupled with blue sky upside from already partnered drug development programmes, at no further cost to Plethora. The strong and experienced management team has a strong track record of product identification and development. The Company announced that it raised £850,000 which was admitted to trading on AIM on 21st December 2010. Plethora is well funded and we believe will continue to provide good news flow in the short and medium term.  We see recent share price weakness as a great buying opportunity.

SeaEnergy (SEA 26.25p / £18.14m)
AIM Listed offshore wind Energy Company announced that Moray Offshore Renewables Ltd (MORL) has signed three agreements for lease with The Crown Estate. MORL is a joint venture, 25 per cent owned by     SeaEnergy’s subsidiary – SeaEnergy Renewables Limited, and 75 per cent owned by EDP Renewables. These agreements will further offshore wind power generation developments at three specific sites in the outer Moray Firth. MORL proposed sites are within the Eastern Development area of zone 1 of The Crown Estates Third round offshore wind leasing programme. The sites will have a combined capacity of 1000 – 1,140MW and are expected to supply enough power for around 750,000 homes. Being part of the Eastern Development is a key milestone for SeaEnergy, as it is the first phase of a two-phase development plan. Together with the Western Development area when completed will deliver around 1500MW of capacity. SeaEnergy has been up and down over the last three months, although has made some upward progress and seems to be on a positive track currently.

Serabi Mining (SRB 41p / £18.36m)*
AIM- listed gold exploration company announced that NCL Brasil Ltda has issued an updated version of the technical report from September 2008, in respect of the Palito Gold Mine and the surrounding Jardim Do Ouro exploration tenements. The previously declared resources were not re-estimated in light of limited mining and additional drilling on the Palito Mine- they remain as measured and indicated resources of 224,272 ounces (gold equivalent) and inferred resources of 443,956 ounces (gold equivalent). The updated report proves a key milestone in applying to dual list ordinary shares on the Canadian Stock Exchange. This will assist in creating greater liquidity in the ordinary shares, which will provide all shareholders with increased flexibility to trade ordinary shares. In early December, Serabi announced a placing with warrants to raise gross proceeds of £3.54m at a price of 3.515 pence per share and then towards the end of the year was granted shareholder approval at a General Meeting for a consolidation of the ordinary shares on the basis of 1 new ordinary share for every 10 existing ordinary shares. The Company’s target is to establish a resource of 1.5m ounces (gold equivalent). Investors can continue to look forward to an interesting series of news flow over the foreseeable future.

Sirius Minerals (SXX 13p / £94.65m)
Sirius Minerals, a potash mining group, announced on Christmas Eve that its wholly-owned subsidiary, Dakota Salts LLC, has acquired a further 1445 net mineral acres of lease areas adjacent to its existing properties in North Dakota. The Company now controls some 10,090 net mineral acres of lease areas overlying the Williston Basin, having an overall land position of 21,492 gross mineral acres within North Dakota. No financial details (of the latest acquisition) have been disclosed. The selling (multiple, unconnected) owners of the acreage received nominal cash payments per minerals acre with royalty payments due on mining production. This is quite normal for the industry.

Solomon Gold (SOLG 31p / £87.20m)
AIM listed gold and mineral exploration company provided a positive operations update for the Fauro project, which is 100 per cent owned by the Company. Surface trench sampling showed 26 meters at 5.30 grams per tonne of gold and 16 meters at 1.40 grams per tonne of gold in Meriguna, with trenching in the area now covering an area of 400m by 250m. Trenching of the Kiovakase prospect showed 16 meters at 1.40 grams per tonne of gold. Further, after having announced the appointment of UPD Solomons Limited as a drilling contractor back in November (which we mentioned in our Small Cap Wrap), drilling of Meriguna started on the 23 December 2010, with a planned length of 450m- this is the first hole of the proposed continuous 9,900m diamond drilling program over the Fauro Island project area, that will be explored through 2011. We look forward to further exciting operational updates over the course of the program.

Sterling Energy (SEY 71.5p / £156.85m)
Sterling Energy, the independent oil and gas exploration and production company announced that operations have been conducted at the Sangaw North block in Kurdistan to remove the hydrocarbon gas, containing 0.5 per cent hydrogen sulphide, which had entered the well bore. The gas influx has been contained, removed from the well bore and flared. The drill pipe in the well bore has been adversely affected by the hydrogen sulphide, with the steel becoming brittle and prone to fracturing. As a consequence, retrieving the drill pipe (that had parted at a depth of 850 metres) has proved challenging. The drill pipe is being recovered in lengths of between 1 and 120 metres and recent operations indicate that the structural integrity of the pipe is improving with depth. If the rate of pipe recovery does not remain sufficiently high, the Company may decide to abandon the existing well bore at the depth of the remaining drill pipe, drill a new bore and the re-drill the remaining section to the planned casing point. At this stage, the Company is unable to provide an estimate of the length of time this could take and the share price has drifted to the current level from 81.5p, where it closed on the day before the announcement. Any positive news on the success and completion of this operation should give the share price a lift.

Synchronica (SYNC 31.75p / £29.56m)
The AIM listed company which develops and provides mobile device management and synchronisation solutions issued a number of announcements over the festive period. The Company has won a contract order that will see Mobile Gateway 5 being offered with the Media-Tek based handsets of a top 10 Indian handset manufacturer, which will see Synchronica receive royalties in excess of US$1m with a minimum of US$250,000 of service fees during the first year. The solution will provide India users with a Blackberry like service with access to functions such as mobile email, calendar/contacts synchronisation, and instant messaging as well as connectivity to social networking sites and RSS feeds. This represents the Company’s third big contract in the Indian market, after installations with two of the largest mobile operations in India; having acquired iseemedia in October 2010 (86 per cent of iseemedia’s shares were acquired at the time, with the remainder having been acquired at the end of December 2010).
A second contract win was also announced during the period, the signing of an agreement for a mobile operator network in the Middle-East worth US$1.5m in the first year alone. This includes US$216,000 of recurring support and maintenance for the life of the licences. These announced orders continue to demonstrate the strength of Synchronica’s product, and growth of the Company’s footprint.

Toledo Mining plc (TMC 25.5p / £10.59m)
The Philippines based nickel exploration and development company is one step closer to start mining operations at the Ipilan project on the island of Palawan.  After Toledo’s subsidiary has had its Strategic Environmental Plan and Environmental Compliance Certificate ratified, only the Definitive Mine Feasibility document requires an official sign off before mining operations can commence, which the Company expects to happen in the second quarter of this year.  Toledo has also raised £1.9 million in new share capital from existing shareholders.

Vatukoula Gold Mines (VGM 171. 5p / £141.73m)
AIM listed gold producer yesterday announced its unaudited preliminary operational results from its 100 per cent owned Vatukoula Gold Mine in Fiji for the first quarter ended 30th November. The ore mined and delivered increased 12 per cent to 80,914 tonne from 72,444 in the previous quarter. The grade delivered was 6.48 g/t, a reduction from the previous quarters
8.81 g/t, as a result of planned increased development which resulted in lower grade development ore being mined and delivered. Underground development increased by over 100 per cent to 5,457 metres (2,650 metres in the previous quarter). Accelerated underground development is scheduled until May 2011 in order to increase production to achieve the target 100,000 ounce per year annualised rate. David Paxton, CEO of Vatukoula Gold Mines, commented: “Alongside the mine development programme, a new major surface exploration program to explore additional potential has been started. We intend to start a new underground exploration program early this year. The mine has purchased a new exploration drill rig that will be used to explore in the mine area as well as our prospecting areas. Further information on the exploration efforts will be provided to shareholders in the coming weeks in a separate news release.” Mine net operating earnings for Q1 were recorded at £3.2m down from £5.5m in the last quarter. The average gold price realised for Q1 was US$1,314 per ounce, up from US$1,199 per ounce realised in the previous quarter. The result of this increase gave the mine similar revenue figures compared to last quarter even with the lower gold sales. The Company is in the process of preparing the necessary documentation for a North American quotation and it is hoped that this can be achieved in the first half of calendar 2011. We last wrote on Vatukoula in August 2010 when the market capitalisation was £80m less than the current £150m market cap.  We continue to see the Company as well financed, and expect continued good news on the production ramp up along with positive exploration results to drive the share price higher over the forthcoming 12 months.

ViaLogy (VIY 4.34p / £30.04m)
A provider of geophysical imaging and hydrocarbon sizing services to global oil and gas customers has successfully completed a technology demonstration project on an offshore prospect for a global non-US exploration and production company. They have been perceived as beyond the scope of conventional processing and analysis technology, and as a potential tool in reducing exploration and production risks. It marks ViaLogy’s first application for an undersea prospect and reinforces QuantumRD’s (assists clients in de-risking prospects to generate drilling targets, position offsets and enhance recovery) value for complex offshore and onshore prospects. ViaLogy also reports discussions with a leading non-US national oil company following its preliminary evaluation of QuantumRD, to apply the technology to an offshore prospect for full operational analysis and de-risking of expensive wells. Furthermore, strategic partnership discussions have begun with a leading O&G service company. If successful, such a partnership could offer opportunities to global markets.

William Sinclair (SNCL 172.25p / £28.51m)
William Sinclair announced preliminary results for the 12 months ended 30th September 2010. Results were most promising with profit before tax up by 66 per cent to £2.06m (2009: £1.24) and net debt being eliminated leaving net cash of £1.81m (2009: £7.04m). Sales revenue for the year was £48.5m, which was a 4.7 per cent increase on the year- whilst sales to the construction industry were down somewhat, a sizeable increase in sales of top soils to the Olympic sites. The Company’s balance sheet also looks particularly healthy with net assets of £17m (2009: £16m) at the end of the period.
Sinclair’s management are of the belief that the horticultural industry is recession resistant, and the results demonstrate somewhat that this may well be the case. When we last wrote on Sinclair we reported on the Company’s acquisition of Monro Horticultural Limited’s premium decorative aggregates business. With further acquisitions sought, there is no doubt that the Company is growing ahead of its peers.

Industry Update- Retail Sector
Our return from the festive break prompts us to comment on the retail sector, which was expected to benefit from the post new year VAT rise, though faced difficult weather conditions. Whilst the weather seemed to have a part to play in performance, a number of the companies that announced poor earnings (including HMV and Clintons) seemed to emphasize its impact, whilst others, such as Marks and Spencer, although affected by the snow (which some estimate to have lost the Company up to £70m in revenue), may have traded quite strongly as a result changes in the mix of sales. Some retailers, such as Morrisons which does not have an online arm and was expected to suffer, has not used the weather as an excuse, advising that shoppers who couldn’t make it to stores would have depleted supplies at home before coming back in store to perform a large re-stock. JJB Sports Plc on the other hand announced plans to raise £31.5m this year to help stave off the effects of the recession and poor weather, with funds being used to assist the Company trade in the short-term only. The concoction of Christmas break events appears to have had mixed fortunes for retail companies, and whilst many used the looming VAT rise as a tool to drive Christmas sales, it appears many may not have benefitted as they expected.

*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.