Small Cap Wrap: Month: May 2014

AIM Breakfast - Archive

15th May 2014

This week: Shoe Zone sizing up IPO, Flowtech powering towards AIM, Conroy Gold reaffirming strong portfolio

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BLUR trading update,CGNR wide mineralised zones,Flowtech Fluidpower intention to float on AIM,Marimedia intention to float on AIM,PEG AGM Statement,RENE new data,RXB first day of dealings on AIM,Shoe Zone intention to float on AIM,XLM preliminary results,C21 preliminary results

Blur Group (LON:BLUR 155p/£45.93m)

Blur Group provided a further update on the expected level of recognised revenue for the year, the total bookings figure and LBITDA for the year ended 31 December 2013. The Board now expects that all revenues associated with a live project with a booked value of $3.6m, which was submitted to the Exchange and commenced in June 2013, will now be recognised from 2014 and beyond, rather than in 2013. Consequently, $4.8m is now expected to be recognised as revenue in the year (2012: $2.8m). The actual bookings intake for 2013, which is the total value of projects submitted to the Exchange in the year and under contract, shows a substantial increase to $22.2m (2012: $2.4m) and the remaining $17.4m of bookings is expected to be recognised as revenue in the future, when delivery of the services have been completed or key contracted milestones have been achieved. The board anticipates that LBITDA for 2013 will be approximately $6.3m (2012: $1.8m). As at the end of April 2014, the Company’s net cash position was $5.6m. However, in order to fund the future growth of the business, blur is exploring the financing opportunities available.

Conroy Gold and Natural Resources (LON:CGNR 1.675p / £5.90m)*

Conroy Gold and Natural Resources, announced that further to the recently completed independent structural study on its Clay Lake gold target in Co. Armagh, a follow up trenching programme has shown wide mineralised zones. The trenching was carried out to further define the veins, cleavage, bedding, structural orientations and general geological units at surface and to relate these orientations to previous drilling. Four trenches were dug – a total of 666 metres – using a large track mounted excavator. Bedrock was encountered in most of the trenching. The results demonstrated that, in addition to the wide mineralised zones intersected in drilling at depth, mineralisation occurs in subcrop at the base of till near surface. Wide sheared and mineralised black shale was present in three of the trenches with a regional East Northeast strike trend. Mineralised black shale in this area tends to be associated with the presence of gold. Correlation of the trench data with drilling data indicates that the central part of the system is steep dipping to the North and may have significant depth extent which is as yet untested. The new geological information further reinforces the view that the Clay Lake gold target may have the potential for high tonnage and overall gold content.

Flowtech Fluidpower (TBC/c£40m)

Flowtech Fluidpower, a UK distributor of technical fluid power products, recently announced its intention to float on AIM. It has an international footprint with its headquarters and distribution centre located in Skelmersdale, Lancashire in the UK, supported by a distribution facility in the Netherlands. Flowtech Fluidpower supplies c.3,000 customers in the UK and Northern Europe. In the UK market, which accounted for c.88 per cent. of the Group’s sales in 2013, Flowtech focuses on supplying fluid power products to distributors and resellers of industrial maintenance, repair and operations products, primarily servicing urgent orders rather than bulk offerings.

Marimedia (TBC/TBC)

Marimedia, the Israeli based provider of proprietary technology solutions, recently announced its intention to float on AIM. The company’s self-developed platform, Qadabra, uses complex algorithms to buy and sell advertisements on a per impressions basis. Qadabra offers automatic integration with online digital advertising platforms for publishers in order to offer advertisers’ bids on a near-instantaneous auction basis. This technology allows Marimedia to optimise online advertising revenue for publishers (i.e. website owners). Founded in Israel in 2007, by Maia Shiran and Ariel Cababie, the Company’s operations are global in nature. Marimedia has been profitable since launch and currently generating monthly page impressions of 64.7 bn. The Company intends to pursue its growth strategy through organic growth, investment in technology and targeted acquisitions.

Petards Group (LON:PEG 11p / £3.78m)*

Petards, the AIM quoted developer of advanced security and surveillance systems, announced at its AGM that corporate activity undertaken and the improvement in the order book arising in the latter part of 2013 has served to place Petards in a considerably strengthened financial position with higher visibility of revenue for both 2014 and beyond. Following on from the reorganisation and the ‘Fit 4 Growth’ programme, management continues its focus on strengthening strategic business relationships and closing orders. The company reported that it traded strongly and profitably in the first quarter of 2014 and is on track for an outcome in line with market expectations for the year.

ReNeuron Group (LON:RENE 3.13p / £55.99m)

ReNeuron Group recently provided a further update on the PISCES Phase I clinical trial of its ReN001 stem cell therapy for disabled stroke patients ahead of the commencement of a Phase II efficacy study for which patient enrolment has now opened. Long term follow-up data out to twelve months in all patients treated in the PISCES study were presented in two platform presentations by the clinical team from Glasgow’s Southern General Hospital at the 23rd European Stroke Conference, in Nice, France. There were no cell-related or immunological adverse events reported in any of the eleven patients treated in the study. Sustained reductions in neurological impairment and spasticity were observed in most patients compared to their stable pre-treatment baseline performance, reflected in the summary evaluation scores. A Phase II study is now open for patient enrolment at the Glasgow clinical site, with other UK centres expected to follow, as required, over the coming weeks and months. The study will involve the treatment of up to 41 patients between 8 and 12 weeks after their stroke. Patients will be monitored on a number of validated stroke efficacy measures up to six months post-treatment.

Rex Bionics (LON:RXB 176.5p/£25m)

Rex Bionics, formerly Union MedTech, which develops and markets hands-free robotic exoskeletons for use by wheelchair users, recently announced its first day of dealings on AIM. The company develops and manufactures hands-free robotic exoskeletons for use by people with mobility impairments. Founded in Auckland, New Zealand by two robotics engineers with first-hand experience of wheelchair users and their needs, Rex Bionics focuses on producing products designed to enable wheelchair users to stand and walk autonomously without the need for crutches or supports and is the only company to mass produce hands-free walking devices for wheelchair users. Rex Bionics’ marketed products: REX Rehab and REX Personal, can be used by people with complete spinal cord injury, but also by a much broader potential customer base, including people with multiple sclerosis and muscular dystrophy.

Shoe Zone (TBC/TBC)

Shoe Zone, a UK specialist value footwear retailer, offering low price and high quality footwear for a family target audience, recently announced its intention to float on AIM. Shoe Zone operates from a portfolio of 554 stores and employs approximately 4,100 employees across the UK and the Republic of Ireland. Shoe Zone’s online offering (www.shoezone.com), combined with its store portfolio, enables its customers to shop via multiple channels. Shoe Zone sells over 20m pairs of shoes per annum. In 2013, the average retail price per pair of shoes was £9.77. Shoe Zone is able to maintain low retail prices due to high volumes ordered, direct sourcing from factories and by maintaining a low product line count.

XLMedia (LON:XLM 67p/£127.00m)

XLMedia, a provider of digital performance marketing services, announced maiden preliminary results for the year ended 31 December 2013. Revenue increased 32 per cent to $34.5m (FY 2012: $26.1m) and gross profit increased 26 per cent to $20.5m (FY 2012: $16.3m). Operating expenses increased 101 per cent to $8.5m (FY 2012: $4.2m) reflecting all infrastructure put into place during 2013 to prepare the Company for listing and future growth. A dividend of $5.25m ($0.02768 per share) was declared to Equity holders.

21st Century Technology (LON:C21 4.75p/£4.43m)

21st Century the providers of CCTV and monitoring systems to fleet and network operators in the Bus & Rail industries, announced its preliminary results for the year ended 31 December 2013. Results were broadly in line with the half year statement from August 2013. Profit after tax shows a small loss of £0.2m (2012: profit after tax £1.3m), giving a basic loss per share of 0.26p (2012: earnings per share 1.45p). Significant changes to the Board were made in the last 4 months of 2013 following a decision to re-focus the Group in order to maximise value to shareholders and a new CEO and FD have been appointed to bring a fresh strategic approach. Immediate actions have been taken upon their appointment to stabilise the Group and improve customer service. The new management team will be providing more detail on their strategic approach in an announcement and presentations to shareholders at the time of the AGM on 5 June 2014.

*A corporate client of Hybridan LLP

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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.