Small Cap Wrap: Month: September 2012

AIM Breakfast - Archive

18 September 2012

This week: Revenue jump for ALT, FUM finances for the future, and EDEN collaborates to research

The FTSE 100 pushed up by 175 points over the last week to Friday to close at 5,920 points, and the AIM All Share rose by 15 point to 712 points. Last week saw a rise in America’s economic confidence on the back of the democratic convention, which no doubt had its impact on UK sentiment, and America also announced a stimulus package amounting to $40bn per month (in mortgage backed securities). Other news included the shrinking of UK construction activity by 10 per cent in the year to July, followed by the government announcing an underwriting of up to £50bn of expenditure in UK construction, and the easing of inflation rates in August to 2.5 per cent from 2.6 per cent in July. Europe’s woes continue, with Spain now having a record 10 per cent of its loans by banks in arrears. The week ahead sees UK retail figures, Bank of England MPC minutes and UK public borrowing figures all being announced.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.
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.

RGO Fundraise, APH Interim results, ALT Interim results, AYM LIM Update, ACE Interims, AVG Final Results, CWR Technology Update, CNR Resource upgrade, EDEN expands agreement, EKT Interims, ETX starts second phase I, EVO launched LabSkin™, FITB launches Fitbug Air, FUM interim results, GAL Planning permission, HAL entry into Brazil, IKA Discontinuing wound care, IDH AGM statement, NPT Ahead of Expectations, OXP exclusive global license and interims, PET Iraq Update, PKP Interim results, POL Komahun update, SUN Interim Results, UBI Hyundai Kia, SNCL New production site

2ergo Group (LON:RGO 24.5p/ £8.69m)
2ergo Group, the mobile solutions company, has reported that it has conditionally raised £2.2m (before expenses) through the placing of 15m new shares with both new and existing shareholders at a price of 10p per share and through three of the Directors, being Neale Graham, Barry Sharples and Keith Seeley, agreeing to subscribe, in aggregate, for 7m new shares also at a price of 10p per share. The placing price is a discount of 74 per cent to the closing mid-market price of 38.5p on 13 September 2012, the latest date prior to the announcement.  The net proceeds of the issue will provide access to additional working capital and the capital resources required to undertake the necessary investment in the roll-out of the podifi™ and TikTap™ contactless mobile technology platforms.

Alliance Pharma (LON:APH 26.5p/£63.44m)
Alliance Pharma, the speciality pharmaceutical company, has announced interim results for the six months to 30 June 2012, which saw a narrowing of both sales and profit before tax to £22m (2011: £24.4m) and £5.3m (2011: £7m) respectively. Hydromol™ (skin care product) did however grow by 28 per cent. Increased competition in part explains the performance, with Nu-Seals (low dose aspirin) for example facing a tough time in Ireland, together with a production issue around the ImmuCyst product. Despite this, the Company increased its interim dividend by 10 per cent to 0.275p perhaps demonstrating management confidence in the outlook for the Company- the acquisition of three products from AstraZeneca UK in August being a key step for Alliance and maybe explaining this.

Altitude Group (LON:ALT 18.25p /£7.80m)
The provider of information and technology services to the promotional products industry announced its interim results for the six month period ended 30 June 2012. Revenue from continuing operations increased by 17 per cent to £2.86m (H1 2011: £2.46m) whilst pre tax profit increased to £235,000 (H1 2011: £63,000). Cash on the balance sheet is higher at £0.61m (H1 2011: £0.29m). Product development continues to be a focus for the Company and is continuing to increase developer headcount modestly in the USA over the next three to six months. The outlook appears to be one of continuing product range development- an official launch of the Customer Focus brand, which offers a range of business management solutions at varying prices for small companies requiring enterprise level functionality, is expected to launch in the latter part of this year.

Anglesey Mining (LON:AYM 9.3p/£14.94m)
Anglesey Mining’s 26 per cent owned associate Labrador Iron Mines Holdings Limited (TSX: LIM) held its Annual Meeting of shareholders in Toronto at which an operations update of its Schefferville area iron ore mining operations was provided. LIM commenced its first full season of production in April 2012. In the operating period to August 31, seven shipments of iron ore have been sold, totalling 1.2m wet tonnes. This is a significant achievement, representing a 3-times increase over iron ore sales for all of 2011. During this period of weakness and uncertainty in the iron ore market, it is essential to remain disciplined in cash management and capital spending programs and reduce operating costs. Consequently, consistent with announcements made by major iron ore companies, some capital investment programs have been suspended and others deferred in order to focus resources on optimising production in the short-term. For the remainder of the 2012 season, LIM plans to produce only standard sinter fines and lump and will continue to work closely with IOC and Rio Tinto to monitor market conditions to seek to achieve the most favourable sales outcomes under difficult market conditions. For 2013 and following years, and subject to market conditions, operations will be focused on Stage 1 and 2 deposits.

Auhua Clean Energy (LON:ACE 38.5p/£24.47m)
Auhua Clean Energy, the environmental technology group based in China, has reported that revenue increased by 35 per cent year on year to RMB95.6m (£9.7m) for the six months to June 2012. Net profit after tax grew strongly by 20 per cent year on year to RMB 23.7m (£2.4m). Orders and cash balances on 30 June 2012 were RMB74.8m (£7.6m) and RMB32.7m (£3.3m), respectively.  The management believes that regulatory changes in the industry and the recognition of Auhua’s strengths by the property-related government agencies will provide the Company a strong foundation towards further growth in second half of 2012.

Avingtrans (LON:AVG  86.5p / £22.52m)
Avingtrans, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, medical and industrial sectors, announced its results for the twelve months ended 31 May 2012.  Turnover increased by 21 per cent to a record £44.0m (2011: £36.3m), gross profit margin was 27 per cent (2011: 29 per cent) on adverse product mix and adjusted PBT increased by 43 per cent to £2.3m (2011: £1.6m).  Net debt increased to £8.4m (2011: £6.6m) and the final dividend was boosted to 1.0 pence per share (2011: 0.4p). Management reported that both the Sigma and CH Precision Finishers Ltd divisions enjoyed strong growth in the civil aerospace market, and that order books were at record levels.

Ceres Power Holdings (LON:CWR 11.75p / £10.13m)
In line with the Company’s announcement of 26 July 2012, Ceres provided an update on the planned programme of work to further improve the long term durability of its core fuel cell technology, and published an independent assessment of the Company’s core technology by an international expert in fuel cells and related technologies. Testing was conducted on simulated natural gas reformate which is identical to actual reformer output in systems operation. In parallel, Ceres continues to improve the already established core technology capability to withstand multiple start-stop events (shut-downs). These results give the Board further confidence that Ceres core technology is compatible with the requirements for a real-world residential CHP appliance. The Ceres development plan requires further testing and refinement of its core technology and validation of degradation and cycling on multiple stacks over extended periods of operation, through to the next field trials in 2014 and the anticipated product launch in 2016.

Condor Gold (LON:CNR 163.5p / £49.89m)
Condor, the gold exploration company focused on Nicaragua, has reported an upgraded Mineral Resource on the La India Project, which now stands at 16.2mt at 4.6 g/t for 2.375m oz gold, including 5.3mt at 4.4 g/t for 0.751m oz gold in the Indicated Mineral Resource category with the balance in the Inferred category. In addition, there is 2.28m oz silver at a grade of 6.5 g/t silver, calculated on the La India and California Veins only where there is sufficient silver assay data. Combining the gold and silver using 67:1 silver to gold ratio, the Mineral Resource for La India Project is 2.41m oz gold equivalent.

Eden Research (LON:EDEN 13p/£14.44m)
Agrochemical and encapsulation development Company announced that it is expanding its collaborative efforts with Certis Europe BV to investigate additional product applications, including using Eden’s proprietary encapsulation technology with an existing agrochemical. In addition, Eden has agreed to extend the term of the existing option agreement that it has with Certis for its nematode product to 31 March 2013 and, at the same time, restrict the territory to Europe only.

Elektron Technology (LON:EKT 16.25p / £19.42m)
Elektron Technology, the developer of fast moving engineered products with market leading positions in connectivity, instrumentation and monitoring and control, has reported that revenues fell by 13 per cent year on year to £29.9m in the six months period to July 2012. Operating profits in this period more than halved to £1.6m. This reflects the economic uncertainty and deferred spending which continued from the second half of last year.   However, the Company continues to invest in new product development capabilities, with new product launches helping to reduce reliance on legacy products.

e-Therapeutics (LON:ETX 40.5p/£55.97m)
e-Therapeutics announced that it has started a second phase I clinical trial of its anti-cancer drug ETS2101. This trial will enrol up to 45 patients with a variety of solid tumours at two UK centres, St James’s University Hospital in Leeds and the Northern Centre for Cancer Care at the Freeman Hospital in Newcastle. It complements an investigator-led phase I study of ETS2101 in brain cancer that began in San Diego, California during June.  Final results from the trial are expected during 2013.

Evocutis (LON:EVO 1.22p/£2.13m)
The company focussed on advanced laboratory and clinical evaluations of skincare products for the health and cosmetic markets, announced the launch of its LabSkin™ full thickness human skin equivalent model as a consumable research tool for cosmetic and pharmaceutical product development. To date, LabSkin™ was only available through Evocutis services. The launch took place this week at the Stratum Corneum conference in Cardiff, UK. LabSkin™ is a unique human skin model comprised of both dermal and epidermal layers constructed from primary human cells (keratinocytes & fibroblasts).

Fitbug Holdings (LON:FITB 1.38p/£2.32m)*
AIM listed provider of online personal health and well-being services yesterday announced the launch of Fitbug Air, the world’s first Bluetooth Low Energy Fitbug activity tracker designed to increase the usability of the Company’s product by wirelessly syncing users’ data to mobile devices.  Fitbug Air provides customers with instant access to their personalised health and wellness programme and Fitbug’s motivational tools anywhere, at any time. Fitbug Air offers seamless, wireless connectivity to the latest generation of mobile devices, including smartphones, such as the Apple iPhone 4S and the recently launched iPhone 5, Bluetooth 4.0-enabled tablets such as the new iPad and the recently updated iPod Touch. Connectivity to other leading Bluetooth 4.0-enabled smartphones such as the Samsung Galaxy S III will follow later in the year. Activity levels can be continuously uploaded without the need for cables, receivers or constant computer access. Additionally, the low energy nature of the technology enables months of continuous usage (up to six months), eliminating the regular need to recharge or replace the battery.  The Company has ensured that the Fitbug Air is very competitively priced in comparison to other online activity tracking and device programmes.

Futura Medical (LON:FUM 60.25p/£44.41m)
Futura Medical announced interim results for the six months ended 30 June 2012. In the period, it gained the rights to CSD500 and MED2002 and regarding PET500, the US launch by Ansell under the LifeStyles(R) brand is taking place and the CRF100 product for Cellulite reduction completed its clinical trial.  John Clarke joined the Company as Non-Executive Chairman to lead the next stages in the Company’s development. Futura posted a net loss of £0.96m in the period with a net cash outflow of £0.72m and had cash resources of £1.86m at 30 June 2012. Futura Medical separately announced a Placing in which gross proceeds of £2.08m are being raised at a price of 57 pence per share. The Placing strengthens the balance sheet and will assist the Company in its out-licensing negotiations as well as the ongoing development of its product pipeline.

Galantas Gold Corporation (LON:GAL 2.88p/£7.37m)
Galantas Gold Corporation, the gold producer and explorer with a 100 per cent interest in Ireland’s only operating gold mine, has received consent from the Planning Service (Department of the Environment Northern Ireland), to construct a lower portal and truncated tunnel structure as part of the restoration of the Kearney open pit at the Omagh gold mine. This keeps open the opportunity to access gold resources below the open pit, whilst speeding up development of an underground mine which is undergoing planning permission. Planning consent was previously given for the removal of excess rock at the lower northern section of the Kearney open pit which provided a restriction to development, though is now subject to a judicial review between the Planning service and another individual on the grounds of procedural failings. The Company also announced the reduction in the workforce.

HaloSource (LON:HAL 21p/£5.58m)
HaloSource has entered into a strategic partnership with Pentair, a leading water solutions provider in Brazil, to market and sell its HaloPure(R) Water Pitcher and replacement cartridges throughout Brazil. Over the next three years, Pentair will offer the co-branded point-of use devices through Pentair’s retail and wholesale channels in the Brazil market. The partnership will add HaloPure technology to Pentair’s product offering to eliminate bacteria and viruses, providing safer drinking water for the consumer. Pentair is a global diversified industrial company headquartered in Minneapolis, Minnesota with sales of $3.5 bn in 2011. According to Verify Markets’ 2012 report on Global Water Treatment, the Brazilian market was the largest global residential water treatment market in Latin America in 2011, with estimated revenues of over $200m. Consumers will find HaloPure-powered pitchers in Brazil starting in Q4-2012.

Ilika (LON:IKA 51.5p/£23.45m)
Ilika, the advanced clean tech materials discovery company, announced that the Company has taken the decision to implement a rationalisation of its biomedical division. The biomedical division currently operates a high throughput platform for the discovery of novel, biologically active materials as well as the provision of wound care products and services. The rationalisation will involve discontinuing the provision of its wound care products and services with effect from the end of the calendar year. The biomedical division will continue to focus on its core competencies associated with its high throughput operations. Turnover generated by the wound care business in the financial statements covering the year to 30th April 2012 was £160,072 (total group turnover £2,011,244), with £188,611 generated from its biomedical high throughput activities.

Immunodiagnostic Systems Holdings (LON:IDH 255p/£72.43m)
Immunodiagnostic Systems Holdings provided a statement during its AGM where it stated expected revenues for the year to be in the range of £48m to £50m. Unaudited revenues for the five months ended 31 August 2012 are £19.9m (2011: £22.7m) which were impacted by exchange differences- these are expected to continue thereby resulting in the expected revenues mentioned above. The Company anticipates a decline in manual Vitamin D test volumes together with more competitive pricing in this market which would also impact the top line. Earlier this week, Immunodiagnostics also announced that Dr Roger Duggan, Deputy Chairman and Business Development Director, had left the Company, with no comment on any replacements for the role.

Netplay TV (LON:NPT  12p / £33.96m)
NetPlay TV, the interactive gaming company, announced its interim results for the six months ending 30 June 2012. Revenue increased by 33 per cent to £13.02m (H1 2011: £9.81m) and cash increased to £10.54m (H1 2011: £6.04m). The Company also announced a maiden interim dividend of 0.15p per share (H1 2011: nil). Increased marketing expenditure and TV advertising has led to the 74 per cent increase in depositing players to 24,951 (H1 2011: 14,364) and total active depositing players increased by 51 per cent to 36,730 (H1 2011: 24,254). Mobile and tablet new depositing customers accounted for 18 per cent of total depositing sign ups.  The Company has had a strong start to 2012 and the management expects year end EBITDA to be ahead of current market expectations.

Oxford Pharmascience Group (LON:OXP 1.4p/£8.08m)*
Oxford Pharmascience announced it has executed its option to exclusively license a drug delivery technology from UCL Business, (the IP licensing arm of University College London) to develop and commercialise a range of re-formulated statins, using the generic drugs atorvastatin and simvastatin. Following a successful evaluation period, the Company has established the feasibility of the delivery system in working with these drugs and undertaken a commercial evaluation to identify the potential for a range of statin products which it is launching under its Safestat(TM) program. Safestat(TM) aims to re-formulate the widely used molecules of atorvastatin and simvastatin into doses up to four times lower than the original dose but with the same lipid lowering efficacy as the original higher dose. Early research into the concept has been extremely well received by both clinicians and healthcare payers alike.
OXP also announced its interims. 2011 was a breakthrough year for the Company having changed its focus to the higher value pharmaceutical market. The commencement of sales to Aché, one of Brazil’s largest pharmaceutical companies and the launch of its OXP zero(TM) taste masking technology left it well placed going into this year. Revenues from OXPchew(TM) technology continue to grow with strong sales from Aché and earlier than expected commencement of revenues to the Far East. Importantly the company signed its first licensing deal with a major global pharmaceutical company, Bayer. Co-development work has begun with Hermes Pharma for a range of ibuprofen direct to mouth granules using OXPzero(TM). This will result in clinical studies later this year to demonstrate the bio-equivalence of OXPzero(TM) ibuprofen salt, a major step towards securing the first licensed medicine using the technology.

Petrel Resources (LON:PET 4.25p / £3.26m)
Petrel Resources provided an update on the Company’s position in Iraq. In mid 2012, Petrel appointed a new Baghdad/Amman based team of Iraqi citizens to review the standing of and opportunities for Petrel in Iraq. The first objective was to clarify the position of Petrel with the national authorities in relation to existing and historic projects in which Petrel has or had an interest. This clarification is now complete. The second objective is to work with national and regional authorities in Iraq to identify projects in which Petrel can be involved and this work is ongoing.

Photon Kathaas Productions (LON:PKP $0.28/$5.92m)
Photon Kathaas Productions Ltd., the South Indian film company has published its results for the six months ended 30 June 2012. During the period it made further progress in developing its portfolio of South Indian language films and associated properties; completed its fifth film Thanga Meengal; Ekk Deewana Tha, a Hindi Co-production with Fox-Star Studios was released; and it commenced production of Tamilselvanum Thaniyaar Anjalum (TTA) bilingual (Tamil / Telugu); and the online trailer  for Tamil/ Telugu bilingual was launched on 2 September 2012 and had record views of over two million (to date) on You Tube  thereby becoming one of the Top Five Most Viewed Videos on YouTube (Entertainment). Five films are due for release in the second half of 2012. Photon reported revenue of US$1,372,368, gross profit of US$368,455, profit before tax of US$114,621 and profit after tax of US$84,515.

Polo Resources (LON:POL 2.77p/ £64.81m)
Polo Resources, the natural resources investment company with interests in gold, oil and gas, coal and iron ore, has reported encouraging drilling results at the Komahun flagship project in Sierra Leone, which it controls through 90 per cent ownership of Nimini. These results indicate a greater deposit at Komahun than modelled and has led the management to initiate an additional 7,500 metres of drilling that is expected to generate additional resources and add to the value of this project.

Surgical Innovations Group (LON:SUN 9.12p/£36.78m)
Surgical Innovations, the designer and manufacturer of creative solutions for Minimally Invasive Surgery (MIS), announced unaudited interim results for the six months ended 30 June 2012, which show continued growth in higher margin SI branded products. Revenues of £3.02m (H1 2011: £3.20m) – entirely made up of Core MIS business revenue were reported, alongside gross margins in core MIS business which increased to 44.8 per cent (H1 2011: 41.9 per cent).  Pre-tax profit before exceptionals was maintained at £475,000 (H1 2011: £474,000) and basic earnings per share before exceptional costs was 0.14p (H1 2011: 0.12p). Net cash of £888,000 was generated from operating activities ex exceptional costs (H1 2011: £594,000). Revenues from SI branded products were up 8.9 per cent to £2.13m (H1 2011: £1.95m and revenues from OEM products were down 28.5 per cent to £0.89m (H1 2011: £1.24m) – due to the timing of key orders expected to fall in H2. Strong sales of Resposable® instruments with consumable pull through are expected in H2 and beyond, with disposable elements from SI Branded Resposable® lines now representing 64 per cent of total SI branded product sales (Full year 2011: 62 per cent). Booked orders for the full year already exceed Group turnover for year ended 31 Dec 2011.

Ubisense (LON:UBI 219p / £47.75m)
Ubisense Group, a market leader in location based smart technology, announced the expansion of its RTLS installation with Hyundai Kia in Asia. The phase two expansion comes after the success of the pilot installation deployed just two months ago to their assembly line manufacturing plant in South Korea. Richard Green, Ubisense’s Chief Executive Officer, said that Hyundai’s decision to increase its RTLS installation reinforces their previous deployment decision and emphasizes the growing traction that Ubisense’s solution is receiving around the world. Ubisense now has a foothold in eight of the top 15 automotive manufacturers globally.

William Sinclair Holdings (LON:SNCL 159.5p/£27.15m)
William Sinclair, one of the UK’s leading suppliers of growing media, announced the acquisition of a major new production site at Ellesmere Port, Cheshire, for consideration of £4.75m, which will offer the Company a second production facility for ‘SuperFyba’, and thereby double the annual production capacity to approximately 300,000m3 per annum.

*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 September 2012

This week: significant MIRL discovery, upgraded DDD television, Bristol-Myers good for SUMM

Back to school was the story of last week, with the FTSE 100 rising 75 points in the week to Friday and closing at 5,777 points, and the AIM All share rose 16 points to close the week at 697. The BoE continued with their interest rate of 0.5 per cent and the ECB maintained a rate of 0.75 per cent, and also firmed up their expected sovereign bond buying programme by announcing it on Thursday. The UK’s trade deficit was also announced to have narrowed in July from £4.5bn in June to £1.5bn in July. The week ahead sees RICS housing market survey, ONS trade data, Unemployment figures and the US decision on interest rates and QE.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.

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.
ANCR New product, BIOM £5.2m Asset Sale, BSST Contract wins, BGL Deep diamond drilling underway, CRW Final results, DDD Upgraded service, EKF Trading update, GLR Update on due diligence,  IKA AGM statement. IVO £1.25m investment in to Acunu, MARL Drilling report, MDZ Financial Results, MIRL New Discovery, NFC Pre-close trading update, NMG EM survey results, OXP ISO9001 accreditation, PLA Trading update, RENE Trading update, SLG Launch of new GPS antennas, SAR Financing, SUMM interims, strategic review and BMY deal, VAL positive scientific findings, XEN appointment on SAB

Animalcare Group (LON:ANCR 129p/£26.73m)
A leading supplier of veterinary medicines announced the launch of a new product for problems related to canine ageing. Vitofyllin will be available in tablet form and acts as a central nervous system stimulant for older dogs suffering from dullness, poor demeanour and unwillingness to exercise. This forms part of a collaboration between Animalcare and three of its European partners, and has enhanced the Company’s in-house expertise having been contract synthesised. The regulatory procedure was also the first time a bioequivalence bio-waiver had been successfully applied for and obtained in Europe. The market in the UK and Ireland is said to be worth some £1.5m per annum.

Biome Technologies (LON:BIOM 0.09p / £5.30m)
Biome Technologies is proposing to dispose of the Company’s 50 per cent. holding in Biotec Holding GmbH to Sphere S.A.; who own the other 50 per cent.   Biome will receive an aggregate total of £5.2m in cash for the shares and outstanding loan of EUR6.23m. The assets of Biotec are currently valued in the Company’s balance sheet at around £9.1m. If the sale proceeds, the Company will incur a write off of approximately £3.8m.  The management point to a combination of factors behind the decision. First a demand for biodegradable plastic polymers manufactured by Biotec has reduced significantly during 2012, following changes in legislation in Italy on the production of plastic bags. Second, the ongoing cost of litigation with Novamont is likely to limit the returns from Biotec in the short to medium term. Third, the overhead costs of a large scale factory and the cost base of the current product chemistry limit the margins available. In view of the size of Biotec and the fundamental nature of the Sale, it is a requirement of the AIM Rules that the Sale be approved by Shareholders at a general meeting of the Company.

BlueStar SecuTech (LON: BSST 6p/£4.4m)
BlueStar SecuTech, a supplier of digital video surveillance solutions in China, has announced that it has received an order from the Bank of Beijing, worth approximately RMB5m (£0.5m). The contract is for the provision of networked surveillance services and solutions for the second part of a project with Bank of Beijing. The Company has also won a contract with Shanghai Pudong Development Bank. The order, worth approximately RMB1.7m (£0.2m), will help build a network command center in the Chengdu branch.

Bullabulling Gold Limited (LON:BGL 11.88p/£34.32m)
Bullabulling Gold Limited announced that the deep diamond drilling project in Western Australia has begun. There are two diamond holes each with a minimum depth of 600 metres, planned in order to validate the 3D geological model that has been developed for the project area which is used to identify the structural setting for gold mineralisation. If the drilling supports this interpretation, it will encourage future exploration targeting and the potential for increasing the Company’s gold inventory in the region. The 3.2m ounce Bullabulling deposit has been sitting above and below an ultramafic unit on the western limb of a major anticline. The model indicates that the ultramafic unit continues on the eastern limb of the anticline, which has not previously been targeted and if mineralised it has the potential to host mineralisation analogous to the existing resource. Historic drilling has intersected mineralisation to the east of the west limb in the anticline hinge zone, confirming that other structures on the anticline are mineralised. Drilling is expected to take four‐to‐six weeks depending on final hole depth with assays anticipated approximately one month later.

Craneware (LON:CRW 425p/£114.72m)
Craneware, the Edinburgh headquartered provider of automated revenue integrity solutions for the US healthcare market, announced final results for the year to 31 December 2012. Revenue was up 8 per cent to $41.1m (2011: $38.1m) whilst adjusted profit before tax increased by 16 per cent to $10.8m (2011: $9.3m). Cash at year end continued at a strong level of $28.8m (2011: $24.2m), and a dividend of 5.7p is to be paid taking the total dividend for the period to 10.5p, some 19 per cent higher than the year before (2011: 8.8p). The Company’s progress continues to be closely linked with the navigation of the US healthcare market, which is seeing healthcare facilities across the country looking for efficiency gains across their revenue generating areas. Whilst 75-80 per cent of revenues currently come from the Annuity SAAS model, which sees licence fees invoiced over a 5 year contract, the balance of revenues continue to come from professional services implementation and a pure SaaS model with monthly invoicing and revenue recognition- as the Company seeks to phase these out one can expect to see continuing benefits to the Company. All in, a sound set of results for the Company.

DDD Group (LON:DDD 24p/£32.21m)
3D solutions company announced an upgraded version of the Yabazam 3D video app for LG 3D Smart TVs, which streams 3D programs on a video on demand (VOD) basis. Yabazam allow consumers to rent original 3D movies and TV shows. It brings the complete library of 3D content available at Yabazam.com to LG 3D Smart TVs, with a wide range of 3D content, including independently produced 3D movies, documentaries, live action comedies and animated features from producers around the world. This announcement follows the half year trading update provided in July, in which the Company stated that it expected First Half revenues to have increased by around 74 per cent to around $4m, benefitting from growing demand for its 2D to 3D conversion software.

EKF Diagnostic Holdings (LON:EKF 28.25p/£71.72m)
EKF Diagnostics Holdings announced a trading update for the six months ended 30 June 2012. Adjusted EBITDA for the period is anticipated to exceed market expectations, due to the Company’s decision to increase its sales focus on its higher margin products, in particular Beta-Hydroxybutyrate (BHB) liquid reagents. Cash at 30 June 2012 was £3.2m, with a net cash position of around £0.6m. Unaudited revenues for the period are expected to be approximately £12.65m; this was lower than expected due to a combination of a conscious decision to delay the launch of Quo-Lab, a low cost HbA1c analyser for developing markets, as well as a delay in the launch of HemoPoint H2 instruments and cuvettes through Alere in the US. Both of these products are now launched and with strong initial sales. Even though the HemoPoint H2 was only officially launched by Alere in the North American market in mid April they have already ordered  in excess of the guaranteed first year minimum of 1,400 analysers in the last 4 months alone. In addition to this Quo-Lab was launched later than expected in early July and we have already sold over 290 units with 70,000 accompanying tests ordered for these units demonstrating the opportunity for this product in emerging markets and the strong consumer interest.

Galileo Resources (LON:GLR  38.5p/£31.98m)
Galileo Resources, the emerging African Rare Earth exploration company, announced with reference to the Heads of Agreement with Rare Earth International (REI) (announced 25 July 2012), that it has completed the due diligence review on the three rare earth projects in Zambia, Mozambique and Spain to its satisfaction in all respects except for the confirmation of the tenure, over the Nkwomba Hills rare earth deposit in Zambia. The licence administration centre of the Zambian Mines Development Department is currently not releasing tenure licence documents for due diligence, or any other purpose, as the Ministry until recently had a moratorium in place on all licences held on record in order to clear various irregularities that have been “piling up for years”. However the Galileo board has a recent written opinion from the Ministry stating that the Nkwomba Licence is the sole Valid Mining Right over the entire area, including the Nkombwa Hills rare earth deposit. The Company’s board, having given due regard to the due diligence completed and the aforementioned official opinion on tenure, has conditionally approved the issue and allotment to REI of 5.25m Galileo ordinary shares, subject to the licence centre releasing the title documentation and confirmation that Nkombwa Licence is the sole valid Mining Right. A further announcement will be made as and when the shares are issued.

Ilika (LON:IKA 54p/£24.6m)
Ilika, the advanced cleantech materials discovery company, has reported that it continues to mature its sales pipeline for the current financial year and its forecasts remain broadly in line with current management expectations. The recent appointment of a business development director in Germany has created a number of partnering opportunities, which it expects to develop from the next quarter. Progress has also been made in securing further support from the Carbon Trust for the fuel cell catalyst material and a further announcement is expected in the next few weeks. The project for the development of thin film battery technology for man-portable batteries is well underway and initial data is expected to be released in Q1 2013.

Imperial Innovations Group (LON:IVO 317.5p/£316.39m)
Imperial Innovations Group has invested £1.25m in Acunu, a data storage specialist, as part of a £3.6m funding round. Acunu has developed a database infrastructure and analytics software package targeting the fast growing Big Data market, which is significantly cheaper and more effectively than competitors. Customers can also search these databases for useful information and analyse it instantly. This is an early-stage, developing market that analysts expect to grow rapidly over the next two to five years.  Acunu has gained some early customer traction in the Telecoms and manufacturing sectors. Acunu will use the funds raised of £6.6m to further develop its product market positioning and build its sales team.  The Company recently hired a new CEO and President, Chris Gomersall, formerly Vice-President EMEA at ServiceNow and Polyserve, and former CEO of Ipsoteck, to lead further growth of the business.

Mariana Resources Ltd (LON:MARL 5.38p/£12.40m)
Mariana  Resources,  the exploration  and development company focused in southern Argentina and Chile, announced positive results of drill  campaign V at its Las Calandrias gold-silver  project  located  in  the  Santa  Cruz  Gold  Province  in southern Argentina.  Twenty-one holes were drilled for 2,164 metres including deepening six previous holes, designed to test new targets adjacent to the current Calandria Sur resource of 519,000 ounces gold equivalent (AuEq) and to validate geological models derived from detailed exploration.  Significant intersections were made in 13 holes – mostly hosted by volcaniclastic or volcaniclastic/rhyolite rocks.  Intersections range in style from bulk tonnage, narrow high grade to wide zones of strongly anomalous gold. Post-resource drilling shows a tabular ‘halo’ of mineralisation around the Calandria  Sur dome, especially  along the eastern  and northwestern borders.

MediaZest (LON:MDZ 0.16p/£0.51m)*
MediaZest announced its results for the year ended 31 March 2012. The Group operates two trading divisions: Touch Vision (TV) and MediaZest Ventures (MV) trading as a division of TV. TV trades as an Audio Visual supply and installation company whilst MV operates as a ‘digital out of home’ creative agency. During the year, MediaZest Ventures added a number of high quality new clients, including Samsung (through their agency Cheil), Serco, Topshop and Boots (through Bezier), and continued to work with long term clients such as JD Sports and Footlocker. Touch Vision was able to win several strong pieces of business including an order in excess of £300,000 from an existing client, and its retail customers, such as HMV and Kuoni, continue to be a significant part of the business. The Group is pleased to announce over £250,000 of new project work won in the first half of the new financial year on top of existing contractual income. Turnover for the year was £2,521,000 (2011: £1,918,000). The Company made a loss for the year after taxation of £424,000 (2011: £457,000) and had cash in hand of £88,000 (2011: £365,000) at the year end. The Group had an invoice discounting facility over the debtors of Touch Vision of which £84,000 (2011: £214,000) was in use at 31 March 2012. As at 31 March 2012, the Group has a current maximum limit of £350,000 under the existing invoice discounting facility. As at 31 March 2012 the Group also had loans from shareholders of £530,000 (2011: £505,000). The Group raised £160,000 before expenses in February 2012 from both existing and new shareholders. The Board has taken steps to reduce annual overhead by over £200,000 following the review of year end 31 March 2012 performance. The Board had targeted a return to improved turnover levels whilst maintaining the lower cost base that had been achieved in the previous year. Despite a tough start to the 2013 financial year, the Group continues to add new clients and develop opportunities with significant long term potential. The main difficulties faced by the Group continue to be uncertainty in the economic climate and continued pressure on client marketing budgets at this time, which makes the scale of future revenues particularly difficult to predict. The Group continues to pioneer new uses for existing technologies such as the virtual mannequin which generates considerable interest. It expects to produce further such products in the coming 12 months which will help provide a unique selling point for its services and also enable it to improve overseas revenues.

Minera IRL Limited (LON:MIRL 44.25p/£67.22m)
Minera IRL, the Latin American gold mining company, announced the discovery of a significant mineralised system at Choique, approximately one kilometre from the Martinetas Vein Field, at the Don Nicolas Project, located in the Santa Cruz Province, Argentina. The Don Nicolas Project is currently in the development permitting process. Results from 35 holes for 2,386 metres of drilling have demonstrated substantial gold and silver intersections in a new mineralised rhyolite dome host within 50 metres of surface.

Next Fifteen Communications Group (LON:NFC 102.5p/£59.60m)
Next Fifteen Communications Group has announced a pre-close trading update for the period to 31st July 2012. The Company anticipates profits to progress over the rest of the year and has added several new major clients. Throughout the year the Company invested in digital marketing services. The investment will continue and has lead to the acquisition of UK-based social marketing agency, Content & Motion, joining Next Fifteen’s pure digital marketing agency, Beyond. The Company has benefited from the strength of the US economy by revenues increasing 50 per cent. However, there is uncertainty surrounding sovereign debt levels in Europe which could impact the global economy and relative currency values.

Noricum Gold (LON:NMG 1.085p/£8.11m)
Noricum Gold Ltd., the gold exploration and development company focused on Austria, has announced highly positive results from the helicopter borne electromagnetic (EM) and magnetic survey covering 28 km2 of the prospective Rotgulden licence area in Austria. The survey results are extremely encouraging with 40 new targets identified in four separate areas. The Company now has a significantly larger area of interest than it originally envisaged and accordingly, a larger number of priority targets will require follow up and drill testing. In particular, at Altenberg, where previous sampling returned high grade results of up to 86 g/t Au and 1,011g/t Ag, the EM anomalies indicate a potential extension to the known mineralisation along strike to the north of several hundred metres.

Oxford Pharmascience Group (LON:OXP 1.08p/£6.20m)*
Oxford Pharmascience, the specialty pharmaceutical company that uses advanced pharmaceutic technologies to reposition medicines, today announced that it has successfully achieved ISO 9001: 2008 accreditation, the internationally recognised standard for an organisation’s internal Quality Management system.

Plastics Capital (LON:PLA 66.5p/£18.32m)
The Group which is engaged in the manufacture of plastic products focused on proprietary products for niche markets, provided a trading update to the market for the financial year to date confirming that the Company is trading broadly in line with market expectations. Eight new accounts have been secured during the year, which in conjunction with new contracts from existing customers has the potential to provide some £2m of additional annual revenue over the next two to three years. Contribution from new business has offset lower sales to existing customers, particularly in the industrial division, which mainly serves the capital goods markets.

ReNeuron (LON:RENE 3.35p/£26m)
ReNeuron, the clinical-stage stem cell business, reported a trading update in which is reiterated that it has submitted an application to the UK regulatory authority to commence a multi-site Phase II clinical trial to examine the efficacy of its ReN001 stem cell therapy in patients disabled by an ischaemic stroke. The trial is designed to recruit from a well-defined population of patients between two and four months after their stroke, which the Company and its clinical collaborators currently believe will be the optimum treatment window for the therapy. The Phase II application has been filed a number of months ahead of plan. This is to allow sufficient time for the regulatory and ethical review process as the remaining patients are dosed and followed up in the ongoing Phase I PISCES clinical trial with ReN001 over the coming months.

Sarantel Group (LON: SLG 0.32p/£2.7m)
Sarantel Group, the manufacturer of high-performance, miniature filtering antennas for mobile and wireless devices, has launched its new SL1250 and SL1350 GeoHelix GPS antennas. Both antennas, which use proprietary technology, are expected to enhance performance and mechanical properties whilst providing customers with an easy to integrate, cost effective, GPS antenna solution. Sarantel’s GeoHelix antennas aim to deliver a level of positional accuracy and reliability that is essential for a rapidly growing number of location sensitive applications. These new products will replace Sarantel’s SL1201 and SL1202 series of antennas.

Sareum Holdings (LON:SAR 1.45p/£21.46m)*
Sareum, the specialist cancer drug discovery business, announced that it has entered into a £4m Standby Equity Distribution Agreement (SEDA) with YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors LLC (Yorkville).  The SEDA is intended to provide a flexible source of future funding to the Company to support its on-going drug research activities as well as reassurance to Sareum’s potential commercial partners that it has access to other funds, in addition to any anticipated licence deal income. Subject to its terms, the £4m SEDA facility can be used entirely at the discretion of the Company. Under the terms of the SEDA, Sareum may draw down funds over a period of up to three years in exchange for the issue of new Ordinary Shares in the Company. On 19 July 2012, the Company issued a Trading Update stating that it expects to conclude a commercial deal with at least one of its research programmes by the end of the calendar year, and the Company stands by that statement.

Summit Corporation (LON:SUMM 2.38p/£8.41m)*
UK drug discovery Company announced its interims, a strategic review that gives more focus and a deal. In its interim results for the six months ended 31 July 2012, Summit stated that its cash position at 31 July 2012 was £4.8m (31 July 2011: £3.7m), and the Company made an operating loss of £1.7m and a net loss for of £2.2m (31 July 2011: £1.4m). The Company has entered an exciting and important period in its development with two clinical-stage assets expected to reach important technical milestones over the coming months. In its strategy update, Summit said that it will focus on the development of its drug programmes targeting Duchenne Muscular Dystrophy (DMD) and C. difficile infections.  The change in strategy will place greater emphasis on clinical development and curtail internal discovery-stage research that is undertaken by approximately half of the Company’s workforce. SMT C1100 is a potential first-in-class utrophin upregulator currently in a Phase I clinical trial.  Results are expected to be reported by the end of 2012. The Company is developing SMT 19969 as a novel, differentiated antibiotic that combines high potency with exceptional selectivity for this bacterium.  The greater focus will support the development of SMT 19969 which is expected to enter clinical trials by the end of 2012. Summit remains enthusiastic about the potential of Seglins and in particular the OGA inhibitor programme.  The OGA programme will continue to progress as planned through to an important technical milestone after which the Company will evaluate its options for taking this forward.  Today, Summit announced that it has entered a technology license agreement with Bristol-Myers Squibb Company (NYSE: BMY) under which Bristol-Myers Squibb will use Summit’s proprietary Seglin™ technology to identify and develop drug candidates for up to ten targets across multiple therapeutic areas. Glyn Edwards, Chief Executive Officer of Summit said: “This agreement with Bristol-Myers Squibb further reinforces our strategy as we seek alternative ways to realise the value of our Seglin technology while we concentrate our resources on advancing our core Duchenne Muscular Dystrophy and C. difficile programmes.” Under the terms of the agreement, Bristol-Myers Squibb will be responsible for the discovery stage research and will have the exclusive right to develop and commercialise any Seglin products that are identified.  Summit will receive a $100,000 technology access fee and is eligible for research, development and regulatory milestones of up to $30 million per product, plus royalties on worldwide sales of products arising from the technology.

ValiRx (LON:VAL 0.68p/£8.50m)*
ValiRx reported encouraging findings following a recent early stage breast cancer study of VAL201, which showed positive inhibition of hormone dependent breast cancer tumour growth in a dose dependent manner. This promising study follows on from ValiRx’s announcement on 29 May 2012 regarding VAL201’s effectiveness against prostate cancer, endometriosis and the spread of secondary cancer tumours or metastasis. Studies have shown that the compound significantly inhibits the proliferation of aggressive tumours and that VAL201 decreases the spread and development of secondary tumours by up to 50 per cent. at projected therapeutic doses. This new indication has shown a positive effect in the oestrogen pathway in women, demonstrating good potential for the development of ovarian and breast cancer therapeutics and it builds on ValiRx’s agreement with Oxford University in April 2011, to accelerate the development of VAL201. ValiRx is pleased to report that it continues to further advance the regulatory filing process towards a phase I clinical trial application for VAL201 with the relevant regulatory bodies in the UK and Europe.

Xenetic Biosciences (LON:XEN 6.12p/£24.28m)
Xenetic announced the appointment to its Scientific Advisory Board of Dr Alexander Gabibov, a world-leading scientist in the field of Biocatalysis. Dr Gabibov (57) graduated from Moscow State University in 1977 specialising in Chemical Enzymology, Dr Gabibov currently holds several senior positions in the Biochemistry sphere in both Russia and France. Since 1997 he has been Head of the Laboratory of Biocatalysis at the Shemyakin & Ovchinnikov Institute of Bioorganic Chemistry at the RAS, and in 2000 became Professor of Cell Biology at the Moscow State University.  In 2003 he became an Associate of the Russian Academy of Sciences then in 2008 was appointed President of the Russian Biochemical and Molecular Biology Society. In 2009 Dr Gabibov took up the role of Foreign Correspondent at the National Academy of Pharmacy in France while, more recently, in 2012 he has been nominated as Head of Department of Industrial Pharmacology at the Lomonosov Moscow State University.

*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.

5 September 2012

This week: Marble quarries for FOX; OMPP gets some soul; Autos see sense in UBI

August was a reasonable month for the indices, though in the week to Friday, the FTSE 100 fell 80 points to 5,708 points, and the AIM All share fell 10 points to 672 but recovered to close the week at 682. The Olympics effect perhaps wasn’t quite as one might have thought it could be- news this week hinted at retail sales being some 0.4 per cent lower in August compared to last year, whilst further afield Moody’s lowered its outlook for the EU’s AAA credit rating to negative. The UK construction sector was announced as contracting at a faster pace (the CIPS construction Purchasing Managers Index dropped to 49.0 in August from 50.9 in July). The week ahead sees all eyes falling on the European Central Bank who meet on Thursday to make their rates decision, and where they are expected to announce that it will buy bonds in the market to help lower borrowing costs for Spain and Italy. Also, the MPC announce their interest rate decision, together with announcements for industrial production and BoE inflation expectations in the UK.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.

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.
AMEI final results, ALU annual results, ABH sign arGentis Pharmaceuticals LLC Agreement, ACE Trading update & key milestones, BIOM Prototype Delivery, BGL Drilling results and expanded resourced, CTI Interims, CFC Update on divestment, CHH Interim Results, CRG Interim Results, ENEG Higher Prospectively, FOX First Day Dealings on AIM, GMC Interims, GDG Operating update, IPP Final Results, LID First Half Trading Update, MDM Wits Gold and GoGold Won, MSYS new system, NETD Interim Results, NTOG Drill-ready Acquisition, OMPP acquisition of Northern Soul ‘YouTube’ content, ORCP Implementation plan, SCLP ModitopeÔ vaccine technology platform, TRT iTrack order and IntelliSAW new pilots, UBI Two Contract Wins, VRP COPD Data Presented at ERS

African Medical Investments (LON:AMEI 0.88p/£2.82m)
AMI continued its progress merging existing specialist hospital facilities in Maputo, Dar es Salaam, and Harare. AMI is now able to capitalise on the growing demand for quality healthcare, particularly from the emerging middle class, foreign business investors, governments and health insurers in Africa. AMI has experience  increased revenues by 124 per cent to $12.1m and reduced loss before tax to $15,021,000, by $3,000,000 from 2011. Although there have been improvements in its  financials, they have not yet reached levels adequate to generate cash from operating activities. Continuing financial support of Harbinger Capital Partners Master Fund I Ltd, who subscribed for $1,825,000 of further loan notes post year end finalisation of its cost reduction programme, will position the Group to significantly improve its financial results.  There is an expansion strategy in place in Tete, Mozambique and Lusaka, Zambia to capitalise on growing demand for quality healthcare, where AMI are working with a major resource company to establish a medical clinic, including the establishment of a polyclinic, and ultimately a fully-fledged hospital, in this growing mining community.

Alumasc (LON:ALU 79.5p/ £28.33m)
Alumasc, the building and engineering group, has announced revenues of £111m for the year to June 2012, marginally above the previous year. Underlying earnings per share fell by 64 per cent to 3p. The Building Products revenues were up 5 per cent to £75m with operating profit up 12 per cent to £4.4m, despite a decline in UK construction activity, reflecting growth in export, roofing & walling, and construction product sales. Engineering Products revenues were maintained at £36m but an operating loss of £0.8m reflected a number of operational issues at Alumasc Precision Components which led to lower gross margins in that business during the year. A profit recovery plan is underway following the appointment of a new management team and divisional board, chaired by Keith Walden who joins the Alumasc Group plc board as a non-executive director.

Angel Biotechnology Holdings (LON:ABH 0.16p/£5.85m)*
Angel Biotechnology announced the signing of a framework agreement with arGentis Pharmaceuticals LLC which establishes the parameters of future contracts for the development and manufacture of their collagen product, ARG201, a treatment for the life-threatening autoimmune disease, systemic sclerosis. Dr Stewart White, ABH Commercial Director and Acting CEO said: “We are very pleased to be able to assist arGentis by providing material for this serious clinical indication. This demonstrates not only the commercial demand for the collagen products that Angel can offer, but the value Angel can offer customers towards accelerating clinical supply.”

Auhua Clean Energy (LON:ACE 38.5p/£24.47m)
Auhua Clean Energy, the specialist split-unit solar water heater system products group based in the Shandong province of China, has reported that trading for the first half year has been in line with expectations.  It has also announced further milestones including the establishment and implementation of industry standards for the split-unit solar water heater industry in Shandong, which Auhua has been a key adviser to.  The Company has signed memorandums of understanding with four large conglomerates for use of Auhua’s split-unit solar water heaters for their property projects. The Company has also been awarded the “Official Recommended Building and Engineering Product” by the Building Materials Department from the China Association for Engineering Construction Standardisation. Auhua is currently the only official recommended supplier of split-unit solar water heaters in the whole of China. Management believes that this recognition will further enhance its sales and marketing efforts going forward.

Biome Technologies (LON:BIOM 0.09p/£5.30m)
Biome Technologies announced that its Stanelco RF Technologies division has successfully delivered the first prototype portable welding device to Durapipe UK Ltd as required under the development contract announced on 10 January 2012. This innovative portable welding unit is designed to work with Durapipe’s new plastic pipe system which contains a steel layer and consequently allows induction heating technology to be used. The innovative 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 project has now progressed to an advanced phase, with a quantity of pre-production equipment due for delivery in the fourth quarter of this year. The development contract is expected to lead to a multi-year manufacture and supply contract between Stanelco RF and Durapipe, which the Company expects to generate revenues in excess of £2m over a three to four year period. The Company also reported, in its interims, that actions to reduce costs by £600k per annum were now effective.

Bullabulling Gold Limited (LON:BGL 11.5p/£33.24m)
Infill drilling was completed at Bullabulling’s Gold project in Western Australia at Bacchus East, Hobbit, Dickson and Bonecrusher.  In total, 26 reverse circulation (RC) holes were drilled for 3,837 metres. Results successfully demonstrate improved continuity of mineralisation in areas with previously low drilling density. An increase in resource tonnage and contained ounces of gold is anticipated, with no material impact on grade. A new resource estimate is to be prepared with a moderate increase in contained ounces of gold anticipated.

Cathay International (LON:CTI 28.5p/£104.84m)
Cathay International Holdings Ltd., an investment holding company and an investor in the growing healthcare sector in China, has announced that revenues in the six months ending 30 June 2012 increased by 25.6 per cent to $48.4m, while gross profit increased by 21.4 per cent to $24.4m. The top-line growth was achieved despite the slow growth seen across China’s economy. Growth was largely driven by Lansen’s core rheumatoid drug sales, the positive results of the repositioning of the hotel and a carefully managed cost base across the group. The performance was dragged by Haotian, which is going into the pre-operating phase of the inositol project, preparing for the full-scale operation. Botai is working towards the market launch of its collagen injectable filler.

China Food Company (LON:CFC 22.75p/£16.25m)
China Food Company, the Chinese manufacturer of cooking and dipping sauces, has announced that due diligence by Wisehand Planning Co. the potential buyer of the Group’s animal feed business has been completed to its satisfaction. Regulatory approval for the purchaser is still awaited at which time the first stage payment of US$4.5m should be received. As previously announced, this approval is taking longer than anticipated.

Churchill China (LON:CHH 332.5p/£36.33m)
Churchill China, a manufacturer and distributor of ceramic and related products announced interim results for the six months to 30 June 2012 in which the Company saw pre tax profits increase by 22 per cent to £0.8m (2011: £0.7m), whilst the interim dividend was maintained at the same level of 4.8p. Despite the difficult economic conditions, the Company has seen an increase in margins in the retail business, with an operating profit of £0.4m (2011: £0.2m) on the back of an increased focus on more profitable sectors and continued cost reduction- new product ranges for 2012 have also helped to increase sales in this area.

Corin Group (LON:CRG 58p/£24.82m)
Manufacturer and supplier of orthopaedic devices reported interim results, which saw revenue of £25m (2011: £21.8m) and pre tax profits of £0.86m (2011: £0.22m). Hip product sales saw healthy growth during the period to £15.9m (2011: £11.5m). Whilst steady sales growth has been seen across a number of territories, there has been a degree of negativity around the Metal-on-Metal product market which poses some potential difficulty for the Company. A number of Corin’s competitors have withdrawn some of their products, and the Company itself has seen an increase in the number of litigation claims and potential claims concerning its MoM products during the first half. However, the Company has insurance on commercial terms in place against product liability claims which should help protect it somewhat.

Enegi Oil (LON:ENEG 8.25p/£10.37m)
Enegi provided an update on the work programme relating to its Onshore Petroleum Licensing Option covering areas of interest within the Clare Basin in Southern Ireland. The Option was awarded to the Company by the Department of Communications, Energy and Natural Resources in Ireland, as announced in the news release dated 14 February 2011. Field studies have been conducted as part of a prospecting programme to assess the Clare Shale for its shale gas potential. The results of sample analysis undertaken to date have been extremely encouraging, indicating a higher prospectivity than was previously anticipated. Fugro Robertson have been engaged to undertake further testing in order to gain a fuller understanding of the prospectivity of the region, and to prepare an independent estimate of the in-place resources within the acreage covered by the Option.

Fox Marble (LON:FOX 21.62p/£23.18m)
The UK Holding Company with licences over five marbles quarries in Kosovo commenced trading and raised £9.65m at 20p per share, valuing the Company at £21.4m. Fox intends to commence quarrying operations initially at two of the Group’s quarries, build a processing plant and develop a sales network for the marble and intends to open two subsequent quarries in the first half of 2014. A recently completed competent persons report explains the Group has indicated marble resources of 91.4m m3 and inferred marble resources of 235m m3. A strong introduction for the Company having raised a decent amount.

Global Market Group (LON:GMC 84p/£82.13m)
Global Market Group, a B2B e-commerce service provider dedicated to connecting manufacturers in China with buyers all over the world, has announced its maiden unaudited interim results for the six months ending June 2012.  Revenues were up 27.9 per cent year-on-year to US$20.3m, with operating income up 35 per cent to US$5.44m. Customer numbers increased from 3,712 at end-December 2011 to 4,543 at end-June 2012 onwww.globalmarket.com.

Green Dragon Gas (LON:GDG 3.98p/£542.75m)
Green Dragon Gas, one of the largest independent companies involved in the production of CBM (coal bed methane) gas and the distribution and sale of wholesale gas in China, has  announced that sales at its existing gas refueling stations increased by 58 per cent year-on-year to 151.1 MMcf (million cubic feet) for the six months to June 2012.  Upstream gas production at the GSS Production Block was 832.4 MMcf in the period, a 31 per cent increase year-on-year.  Gas sales volume through the distribution stations in ZPH (Zhengzhou Petro-China Hengran) and APH (Anhui Petro-China Hengran) increased 1 per cent from 1.38 in H1 2011 to 1.39 Bcf in H1 2012.  Downstream sales of gas at BHY (Beijing Huayou) decreased to 6.3 Bcf in H1 2012 from 6.57 Bcf in H1 2011 representing a 4 per cent decrease over the same period last year due to a large BHY customer temporarily closing a power facility for an upgrade which is now back on line.

IPPlus (LON:IPP 10p/£3.17m)
IPPlus has experienced improvements to profit after taxation as it rose to £408,096 up from £66,914 and in the year ended 30 June 2012. Group revenues have increased by 29 per cent (£1.5m) to £6,784,159. During the current financial year the Board proposes to invest a further £120,000 to develop IP3 Telecom’s offerings, providing bespoke automated Interactive Voice Response (IVR) solutions to the banking and financial sectors.  CallScripter, an enhanced customer interaction software suite specifically developed for contact centres, telesales and telemarketing operations, increased its overall revenue by 24 per cent in the year and securing a new international distribution agreement.  Ansaback the company’s 24 hours telephone service has been productive with revenues increasing by 25 per cent and gaining a 3 year contract to provide emergency help desk cover for a major utility company.  IPPlus is reliant on intellectual property rights surrounding its internally generated and licensed-in software. However, it may be possible for third parties to obtain and use the Group’s intellectual property without its authorisation. The firm has enforced a Disaster Recovery and Data Centre facility at an office 5 miles away from the main building to reduce operational risk.

LiDCO Group (LON:LID 17.5p/£30.51m)
LiDCO has reported results of revenue increasing by 4 percent to £3.3m, alongside product sales increasing by 18 percent. With the UK sales rising, export sales for LiDCO have decreased due to the recurrence of licence fees. Progressions for the monitor integration and parameter convergence project are developing well, incorporating a depth of anaesthesia function and a non-invasive blood pressure module and LiDCO aims to launch the product by the final quarter of 2012. The Company also announced that John Barry has resigned as Sales and Marketing Director after 11 years at LiDCO.

MDM Engineering Group Limited (LON:MDM 142p/£52.91m)
MDM Engineering Group Ltd, providers of a wide range of services from preliminary and final feasibility studies, through to plant design, construction and commissioning, was awarded the Definitive Feasibility Study for Witwatersrand Consolidated Gold Resources Limited (Wits Gold) DeBron Merriespruit South project (DBM) in South Africa. Wits Gold is the mineral rights holder of the DeBron and Merriespruit prospects in the Free State gold field. The two prospects are being considered together as a single entity and have been named the DBM Project. The scope of work is the implementation of engineering design and costing for the process plant and associated infrastructure, to produce a DFS for Wits Gold DBM project. MDM also announced separately today that it has been contracted to complete a Pre-Feasibility Study for GoGold Resources, a Parral Tailings Project in Chihuahua, Mexico.  The project consists of dry land tailings deposited from the Mina la Prieta silver and base metal mine in separate areas.

Microsaic Systems (LON:MSYS 39.5p/£16.80m)
Microsaic Systems today announced that Biotage AB, a leading global supplier of laboratory equipment, will be presenting its fully integrated solution for ‘Mass Directed Flash’ purification at JASIS 2012 (Japan Analytical Scientific Instruments Show) in Makuhari Messe, Japan (5-7 September). This is the first time Biotage has presented the new system, which incorporates Microsaic’s novel miniature mass spectrometer – the Microsaic MiD. Microsaic entered an agreement in May 2012 with Biotage, previously identified in announcements as ‘an international supplier of laboratory equipment’, to provide its MiD chip-based scientific instrument as an Original Equipment Manufacturer (OEM). Since then, Microsaic has further developed the MiD and the companies are at an advanced stage of integrating it with Biotage’s flagship Flash purification system Isolera™. The new integrated system is expected to be commercially available in early 2013. Mass directed flash purification is a powerful technique for collecting compounds based on mass allowing the chemist to purify and analyse compounds at the same time.

NetDimensions (LON:NETD 31p/£7.84m)
NetDimensions, the provider of performance, knowledge and learning management systems, announced results for the six months to 30th June 2012. Revenue grew by 34 per cent to $5.9m (H1 2011: $4.4m) and a 32 per cent increase in the Company’s net cash position to $7.8m (H1 2011: $5.9m) was recorded. 42 new clients were added during the period, with Asia Pacific in particular seeing a 40 per cent increase in revenues, and China an impressive 159 per cent. Post period end the Company has started to trade in the OTCQX in the US and is looking to release an iPad/Android mobile app before the end of the 3rd quarter.

Nostra Terra Oil & Gas (LON:NTOG 0.47p/£10.19m)
Nostra Terra, the oil and gas producer with projects in the USA, announced that it has entered into an agreement with Ward Petroleum Corporation to acquire a 20 per cent working interest in the Chisholm Trail Prospect, located in Oklahoma. The Area of Mutual Interest within the prospect covers a non-contiguous area of over 1,420 acres. The acquisition further enhances Nostra Terra’s portfolio of wells in areas where proven horizontal drilling and completion technologies are being applied to known reservoirs. The leasehold also includes working interests in 4 additional wells, to be drilled by other operators. Leasing and permitting for the initial wells has been completed and they are ready for drilling. A 20 per cent net, non-operated interest in the initial well planned to be drilled by Ward plus smaller interests in four more non-operated wells have been secured. Nostra Terra’s total estimated cost of lease-hold activities is US$300,000 and drilling for the first three wells is estimated to cost US$720,000, the significant majority of which is related to the 20 per cent working interest well.

One Media Publishing Group (LON:OMPP 4.05p/£2.15m)*
PLUS quoted consolidators and acquirers of music and video rights announced that it has acquired the content exploited via the ‘YouTube’ channels featuring all of the Motor City, High Energy & Northern Soul videos produced by legendary producer Ian Levine. The ‘Levine’ YouTube channel has had in excess of over 15 million views to date. One Media has now annexed this acquisition to the deal it originally completed with him on the 7th April 2010. Featured on the channel are 550 exclusive videos of Disco, High-Energy, Motown and Northern Soul videos, including Evelyn Thomas performing ‘High Energy’ and The Trammps performing ‘Hold Back The Night’ which together have achieved over 2 million views. As a YouTube Premier Partner, One Media is able to monetise its content viewed on YouTube through advertisements and subscription accounts. Michael Infante, Chairman and CEO said, “YouTube is already a dominant force in the digital video broadcasting sector and we anticipate that with the market penetration of ‘Smart TVs’ increasing within the home, more consumers will be using this medium over the coming years. This deal is very important for One Media as it demonstrates our intention to build greater market share in the music video content sector.”

Oracle Coalfields (LON:ORCP 2.5p/£5.37m)
Oracle Coalfields, the coal developer of a lignite mineral property located in the south-eastern desert of the Sindh Province in Pakistan, has released details of its Implementation Plan to demonstrate the capital and operating costs for the development of a lignite coal mine to supply a 300MW power plant at the mine site. The plan has been prepared by Dargo Associates Ltd., a UK based independent coal consultant. According to this plan, the total investment to bring the mine into full production is $463m. The cost of mining equipment and infrastructure has been reduced by $434m largely due to a reduction in planned mine production from 5m wet tonnes per annum to 2.4mn wet tonnes per annum. It targets an IRR of 20.5 per cent as part of fiscal incentives offered by the Government of Pakistan.

Scancell Holdings (LON:SCLP 30.75p/£59.80m)
Scancell Holdings announced the development of a new platform technology (ModitopeÔ) that stimulates the production of killer CD4 T cells with powerful anti-tumour activity. The Directors believe that this new discovery could have a profound effect on the way that cancer vaccines are developed. CD4 responses to cancer associated antigens have been notoriously difficult to generate whether presented as peptides, proteins or DNA. CD4 cells are vital for effective anti-tumour immunity. Scancell has identified and patented a series of modified epitopes that overcome this limitation. Scancell’s ModitopeÔ technology produces killer CD4 T cells that destroy tumours without toxicity. David Evans, Chairman of Scancell Holdings, commented: “This highly innovative discovery opens up a new approach to the development of cancer vaccines. Whilst currently at an early stage, we are aware that the opportunities could be considerable in addition to Scancell’s existing platform technology. As a result, the Board is actively evaluating its strategic options for this new technology platform and will be consulting with key shareholders in this regard. We are excited by the potential and are resolute in our aim of creating the greatest value for shareholders. The Board will update the market in due course.”

Transense Technologies (LON:TRT 11.12p/£21.94m)*
Transense Technologies announced that its trading division, Translogik has received an initial order for its iTrack Tyre Temperature and Pressure Monitoring Systems for mining and off-the-road vehicles (iTrack) from its Indonesian distributor, AutoRFID Solutions Sdn Bhd. (AutoRFID). The iTrack system will be installed as part of a pilot scheme on three of the 168 vehicles at the ADARO mine in Indonesia, one of AutoRFID’s clients. The ADARO mine is expanding its operations and expects to be running more than 300 vehicles by the end of 2014. Transense separately announced that its trading division, IntelliSAW, a leading provider of next generation wireless sensor systems for smart grid applications, has continued to see strong demand for its innovative wireless/passive temperature monitoring solutions. This has resulted in the recent commissioning of three new pilot installations of its IS485 electrical switchgear monitoring systems with major industrial companies. The pilot systems were installed at sites owned by Petrobras in Brazil, currently the fifth largest energy company in the world, Southern China Grid, a major regional power company supplying 230 million people, and the Gujarat State Electricity Corporation (GSECL) in India, which runs twelve power stations. Until now all pilot installations have been carried out by the IntelliSAW technical team, however the new pilot at the Southern China Grid site was carried out by a regional partner. As more of IntelliSAW’s channel partners gain expertise in the product this will allow for significant scaling in the rate at which new sites can be added. Previously announced pilots are continuing and the Company looks forward to these leading to full deployments as customer testing programmes are successfully concluded.

Ubisense (LON:UBI  211.5p/£96.11m)
Ubisense Group, a market leader in location based smart technology, announced that it has been awarded two contracts for real-time location projects by two of the world’s largest automotive manufacturers. The first project involves an installation of Ubisense and Atlas Copco’s Tools on a large scale assembly line in Germany and represents the third major German automotive manufacturing Group that Ubisense has been contracted to supply with its location solutions. Ubisense has also been awarded a contract with another major automaker to support the continuous improvement (or kaizen) of their manufacturing processes through the adoption of Ubisense’s e-Kaizen solution at a North American plant.

Verona Pharma (LON:VRP 4.5p/£13.82m)
Verona Pharma, the drug discovery and development company with first-in-class drugs to treat respiratory diseases, today announced the completion and reporting of data from a clinical trial with its lead drug candidate, the dual PDE 3 and 4 inhibitor RPL554, in patients with chronic obstructive pulmonary disease (COPD). The data was presented at the European Respiratory Society (ERS) Annual Congress in Vienna. The data showed that a single dose of nebulised RPL554 to patients with COPD produced a rapid bronchodilator response, greater than a 15 per cent increase in FEV1 (forced expiratory volume at 1 second). This magnitude of bronchodilator response was significantly larger than that produced by placebo and appeared to be at least equivalent to that produced by a standard dose of the reference bronchodilator beta2-agonist salbutamol in these patients. This completes the first bronchodilator study in mild to moderate COPD patients at the Tor Vergata Clinic in Rome and is an expansion of the pilot part of the study announced by the Company on 10 November 2011.

*A corporate client of Hybridan LLP

A full archive of previous weeks’ Small Cap Wraps can now be viewed on www.hybridan.com.

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.