Small Cap Wrap: Month: June 2014

AIM Breakfast - Archive

18th June 2014

This week: Rangers kick off with strong ticket sales while Gaming Realms acquires players

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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.

Abzena intention to float on AIM, ALL trading update, ARTA trading update and board changes, CDialogues intention to float on AIM, CBUY statement re share price movement, CSRT final results, CRU update re: supply agreement, Ergomed intention to float on AIM, GMR interim results, Global Invacom intention to float on AIM, IMImobile intention to float on AIM, LID AGM statement, PROX AGM statement, RFC strong season ticket renewals, SAR issue of equity, TUNG market update

Abzena (TBC/TBC)

Abzena, a revenue-generating life sciences company providing services and technologies that enable the development of better biopharmaceutical products, recently announced its intention to float on AIM. Abzena’s mission is to enable R&D companies to develop better biopharmaceutical products – e.g. therapeutic antibodies and proteins – with one or more of the following attributes: improved efficacy, fewer side effects, more predictable quality and/or improved patient compliance. The company has a range of complementary services and technologies (covering biopharmaceutical immunogenicity assessment, antibody and protein engineering, manufacturing cell line development and bioconjugation). Abzena’s strategy is to continue to grow as a provider of services and technologies for biopharmaceutical R&D through expansion of its capacity to deliver services to its customers, investment in the development of new technologies and services and through strategic acquisition of additional technologies and capabilities

Allocate Software (LON: ALL 119p/£81.27m)

Allocate Software, the provider of workforce and compliance optimisation solutions, provided an update on trading for its financial year ended 31 May 2014. The Company’s audited results will be announced on 21 July 2014. During the period, the Healthcare division secured a significant number of contracts with both new customers and also for new products. Healthcare revenue has risen to 86 per cent of Group revenue from 79 per cent in 2013. Ian Bowles, Chief Executive Officer of Allocate commented: “2014 was another strong year for Allocate, underpinned by compelling levels of organic revenue growth and a significant increase in profits and margins. We have responded quickly to the evolving requirements of the NHS and during the year have designed, built and deployed the capability to provide the safe staffing reporting required of all NHS Trusts by NHS England and NICE. Our core offering, HealthRoster, has maintained its market leading position. We have secured the same number of new HealthRoster customers as in each of the last two years and continued to renew 100 per cent of HealthRoster term licenses. We more than doubled the number of Cloud customers as well as the number of customers that are now live on the V10 platform. Allocate closes the financial year 2014 with high levels of customer engagement and we remain confident that we are well positioned to continue to meet their needs and deliver on the strategy that we have laid out.”

Artilium (LON: ARTA 15.75p/£5.125m)

In the interim results statement of 27 March, Artilium stated H2 revenue growth would depend on a promising sales pipeline conversion during a period of challenging conditions. The recent trading update confirms that these conditions have persisted. However the Board believes that there are a growing number of sales opportunities available to Artilium to address. The Company’s financial performance for FY2014 remains dependent on the timing of the pipeline conversion. The Board expects H2 EBITDA to be lower than that of H1. Artilium’s unaudited cash balance at 31 May was approximately EUR 634k. It is proposed that on 1 July the current Chairman, Patrick Morley, and CEO Willem Van Den Brink will step down, to be replaced by existing non-executive director Jan-Paul Menke and Bart Weijermars respectively. Bart Weijermars was previously CEO of T-Mobile in the Netherlands from 2009 to 2011.

CDialogues (TBC/TBC)

CDialogues, a provider of specialised marketing services to mobile network operators (MNOs), with a particular focus on emerging markets, recently announced its intention to float on AIM. Using proprietary algorithms, CDialogues enables MNOs to provide targeted value added services to existing and new subscribers with the aim of maintaining and increasing subscriber numbers and increasing average revenue per user. CDialogues’ main countries of operation are Iraq and Kuwait. The company is expected to raise £1.25m with an anticipated market capitalisation of c£13.23m.

CloudBuy (LON: CBUY 31.875p/£35.04m)

The Board of CloudBuy noted the recent downward trend in the Company’s share price, and is not aware of any business reason for the drop in value. The Company is performing strongly and is ahead of plan in terms of prospects and leads. There are a number of significant opportunities being pursued in Australia, New Zealand, Hong Kong, China, India, South Africa, USA and Canada along with major opportunities in the UK, specifically in Education, Defence, Health and Social Services. Whilst it is difficult to predict timings the directors expect a number of significant contract wins in the next few months. Chairman of CloudBuy, Ronald Duncan said: “I am delighted with the progress we have made since we raised the £ 5m in October 2013. Last week we visited a major multinational who believes that our marketplace model is the future of procurement, and I expect to see a take-off in our contract wins shortly.”

Consort Medical (LON: CSRT 891.25p / £260.92m)

Consort Medical, a leading designer and manufacturer of drug delivery device technologies, announced its audited results for the year ended 30 April 2014. Bespak revenue surpassed £100m, with strong organic revenue growth of 5.2 per cent, in particular from Chiesi NEXThaler® and growth in adjusted EPS of 8.5 per cent to 48.3p per share. The Company announced an increased final dividend to 13.35p per share and that it had net cash of £25.8m despite significant investment in facilities and production capacity. During the period, it announced regulatory approval and the launch of the first auto-injector, for Dr. Reddy’s Sumatriptan, a migraine therapy and the award of an exclusive multi-year commercial supply contract for a dry powder inhaler (DPI) programme DEV610. The award of Bespak’s first MHRA licence for commercial drug handling for Nicoventures’ nicotine inhaler was granted during the period, as well as the unveiling of Syrina® and Vapoursoft®, delivering the first such liquid gas propelled auto-injector. The period also saw the completion and pilot scale manufacturing of Atlas Genetics io™ Cartridge (POC010) and the award of a development contract for novel PatchPump® infusion device from Steadymed.

Coral Products (LON: CRU 14.5p/£6.08m)

Further to the Company’s announcement on 16 April 2014, the Board is pleased to announce that the ten year supply agreement with a leading national on-line retailer has now been signed. Pursuant to the Agreement, the Company will supply a range of totes to support the on-line retailer’s growing presence as it capitalises upon its acknowledged expertise in this fast expanding area. The customer has indicated that it expects to place orders that would generate revenues to the Company of approximately £8m in the first two years of the contract. Initial deliveries are programmed from June 2014.

Ergomed (TBC/TBC)

Ergomed, a UK-based company, dedicated to the provision of specialised services to the pharmaceutical industry and the development of new drugs, recently announced its intention to float on AIM. Ergomed operates in over 40 countries engaging more than 200 people across five continents. Ergomed has two complementary businesses: The Services Business – a well established, clinical research business providing services to the pharmaceutical and biotechnology industry. The company also operates The Co-Development Business – a growing portfolio of partnerships with pharmaceutical and biotech companies, providing its drug development services as a contribution in kind in exchange for a carried interest in any revenues attributable to the drug asset, including out-licensing milestones as well as sales of the product.

Gaming Realms (LON: GMR 30p/£48.2m)

Gaming Realms, which creates, publishes and markets next generation online gaming products, announced its interims to March 2014. Revenue grew 400 per cent to £3.6m driven by a 61 per cent increase in depositing players to 47,174 and a 234 per cent rise in daily active players to 4,576. The company recorded a loss before tax of £4.9m including £5.2m spent on marketing. GMR ended the period with £1.8m of cash on the balance sheet. In December 2013, the Group acquired Quick Think Media for £2.3m to help facilitate its strategy of marketing across digital channels and in particular Facebook, which has already lowered the cost per active player on Pocket Fruity by 52 per cent. The Board remains confident that the Group is well positioned to maintain its strong growth trajectory and continued player acquisition. Part of the Group’s mid-term term strategy is to develop a number of brands on its proprietary platform which should improve overall profitability following its launch in Q3 2014.

Global Invacom (TBC/TBC)

Global Invacom, a leading innovator and manufacturer of technology to the global satellite industry, recently announced its intention to float on AIM. Global Invacom is a company incorporated in Singapore which is the holding company of the Global Invacom group of companies that develops, manufactures and distributes various communications technology both under its own name and as an original equipment manufacturer for its clients. The Group is an established supplier of satellite communications technology to, amongst others, BSkyB, DISH and EchoStar and is experiencing increasing demand for its products from both its existing and new customers. In addition to broadcasters, the Group’s customers also include building developers, electrical contractors, installers and mobile systems integrators. The Group’s two core businesses are the design, development and manufacture of satellite communications solutions including satellite dishes, low noise block (LNB), satellite TV, and cable peripherals and precision waveguide solutions for a number of multi-national clients. The company is also involved in contract manufacturing of electronic solutions including circuit boards for use in, inter alia, set-top boxes and point of sales terminals on an original equipment manufacturer basis.

IMImobile (TBC/TBC)

IMImobile, a leading global technology company providing software and services which help businesses capitalise on the growth in mobile communication, recently announced its intention to float on AIM. Its solutions help its clients engage and transact with their customers more efficiently through smarter mobile engagement. The Company has developed a suite of software applications and services targeted at both mobile operators and enterprises marketed principally under the DaVinci brand. The company is expected to raise between £25m-£30m on admission giving a market capitalisation between £51.7m-£56.7m.

LiDCO Group (LON: LID 17.875p / £34.71m)

LiDCO Group, the cardiovascular monitoring company, held its Annual General Meeting. At the meeting Terry O’Brien, Chief Executive Officer of LiDCO, made the following statement: “I am very pleased that we will be asking shareholders to approve the Company’s first Annual Report and Accounts that show a profit before tax and cash generation (before financing). Although last year saw considerable achievements against our objectives, these two achievements were a watershed moment for the Company. As well as having a strong position in the clinical market place, the business is also now well positioned financially to deliver further growth. The Company is well-funded and we expect to be debt free by the end of the year. We look forward to continued growth in profitability and remain confident of meeting market expectations for the full year.

Proxama (LON: PROX 4.575p/£37.02m)

Proxama’s David Bailey, Non-Executive Chairman, gave a detailed update in an AGM statement pointing out that, Proxama has been investing heavily in its NFC proximity payments platform (and most recently HCE – Host Card Emulation) ensuring compatibility with all market developments and requirements. The Company has a growing pipeline of sales opportunities with major banking groups across Europe and South America, and fully expects to have the first service running with live payment cards in Q3 2014. The statement states that first half revenues will still be modest, though the board expects a significant increase in second half revenue, and anticipate a strong performance in 2015 as pilots turn into full scale roll-outs. The Company also reported that it has partnered with PrePay Solutions (PPS), to provide mobile contactless payment solutions to PPS’s customer base. A world leader in prepaid and technology services, PPS (jointly owned by Edenred and MasterCard) and Proxama are collaborating to enable PPS’s customers to make contactless payments via their mobile device, leveraging Host Card Emulation (HCE).

Rangers International Football Club (LON: RFC 27.5p/£17.9m)

Rangers F.C have confirmed that approximately 17,000 season tickets have been renewed to date for the Club’s forthcoming SPFL Championship season. This level of renewals reduces the potential requirement for short term financing as highlighted in the Business Review Summary published on 25 April 2014 particularly given the updated season ticket pricing structure for the 2014/15 campaign. The Board also notes the strategic objectives that it identified in the Business Review Summary published on 25 April 2014 and the related funding requirements. The Board continues to evaluate its plans in this regard and will update the market in due course.

Sareum Holdings (LON: SAR 0.525p / £9.45m)*

Sareum Holdings announced a conditional funding of £550,000 by way of a placing and an Equity Swap Agreement at 0.50 pence per share. YA Global Master SPV, Ltd. (YAGM) has subscribed for a total of 110,000,000 new ordinary shares in the Company at a price of 0.50p per share for a gross consideration of £550,000. The Company and YAGM have entered into an equity swap agreement covering 78,750,000 ordinary shares, pursuant to which the Company will pay YAGM £200,000. In consideration for this payment, the Company will receive twelve monthly payments of approximately £16,667, amounting to £200,000 in aggregate, between the date of the Equity Swap Agreement and 30 June 2015. The monthly payments can be adjusted either: up, if the average of the lowest 10 day VWAP during the relevant one month period is greater than 0.55p, being a 10 per cent premium to the Placing Price; or down, if the average of the lowest 10 day VWAP during the relevant one month period is lower than or equal to 0.55p. This would result in the Company receiving less funds from YAGM in any relevant one month period. Thus the funds received by the Company from the Equity Swap Agreement will be dependent on the future price performance of the Company’s ordinary shares.

Tungsten Corp (LON: TUNG 283p/£283m)

Tungsten Corp, the operator of a leading global e-invoicing network, has announced that Tungsten Network has been accredited as a supplier of the UK Government Crown Commercial Service, G-Cloud 5 Framework. Tungsten Network sees this development as a major step in cementing its relations with the public sector and strengthening its operations. Accreditation will help to accelerate business development as public-sector bodies benefit from pre-negotiated terms and fixed prices. It also eliminates the need for the public sector to tender competitively for the services covered by the framework, which in the UK can cost over £45,000 per process, the highest in Europe.

*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.

10th June 2014

This week: Rosslyn knocks it out the Park, Max sees hydrocarbons, M&M sporting AIM IPO

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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.

C21 AGM statement, COG£1.6m contract for phase III, EYE customer update, ECK patent granted & US partnership, GRA final results, HCM initiation Phase II study, MandM Direct intention to float on AIM , MXP drilling update, RDT trading statement, SND interim results, SPHR CE mark, TCN final results, TSTL trading update, Zibao Metals Recycling intention to float on AIM

21st Century Technology (LON: C21 5.375p/£5.01m)

21st Century’s Chairman, Mark Elliott, made a statement at the AGM: “In our recently issued Annual Report I said that whilst there have been a number of challenges in the last year I am cautiously optimistic about our future, not least because of the new energy, drive and direction brought about by the new leadership team. I also said that our expectation for the current year is for revenues to be similar to 2013. I added that we are currently trading in line with Board expectations and every effort is being made to develop new lines of business and secure positive outcomes from the important contract negotiations and renewals due later on this year. Trading in the financial year so far has been in line with those comments, and there has been no material change in our expectations. We have made a number of innovative major system proposals to both rail and bus operators, which if successful will begin in H2 and provide the foundations for a return to growth in 2015…”

Cambridge Cognition Holdings (LON: COG 61p / £10.30m)

Cambridge Cognition Holdings, which specialises in computerised neuropsychological tests including those enabling the early detection of dementia, the signing of a significant contract for a global-year study in which Cantab Solutions will be used to assess the cognitive safety of a new medicine under development for cardiovascular disease. Contract, with a major biopharmaceutical company, is worth £1.6m to Cambridge Cognition, with £0.8m revenue to be recognised in the 2014 financial year. The significant value of this contract gives the Directors confidence in achieving full year expectations. appointment to this major study is indicative of a significant increase in demand for Cantab technology for use in studies designed to demonstrate the cognitive safety of new and in-market drugs. Regulatory bodies such as the FDA are increasingly alerting companies to the need to assess the potential neurocognitive side effects of in-market and experimental drugs across a wide range of compounds and disorders.

Eagle Eye Solutions Group (LON: EYE 165p/£33.22m)

Eagle Eye, a provider of digital consumer engagement to the retail and hospitality industries, announced a customer update following the Company’s admission to AIM in April. The Company continues to trade in line with the Board’s expectations. Clarks, JD Sports, La Tasca, One Stop, Pets at Home and Spirit Pub Company have all now gone live on the Company’s patented Eagle Eye AIR digital transaction platform and these new live customers are together expected to deliver annualised revenues that exceed £0.5m. These new customers join more than 70 other brands that are already live on the Eagle Eye AIR platform. The company will issue its next trading update in mid-July.

Eckoh (LON: ECK 46.5p/£100.5m)

Eckoh, a global provider of secure payment products and customer service solutions, announced that it has been granted, effective from the 11 June 2014, a patent (No. 2478916) for the transaction security method and system that underpins its Call Guard product. The patent was filed in 2010 by Veritape, a leading secure payment solutions company acquired by Eckoh in June 2013. Both Eckoh and Veritape have specialised in developing card payment solutions to assist companies in making ‘card-not-present’ transactions more secure, particularly those made over the phone through a contact centre. The Company also reported that it has signed a five-year exclusive agreement with a leading US based provider of business process outsourcing and communication services, to distribute its secure payment products across the US. The agreement, has minimum revenue payments to Eckoh over the five-year term of the agreement totalling $24m, which become payable based on achieving certain sales criteria, measured annually. This agreement will enable Eckoh to target new customers and the Partner’s existing US customer base, which includes over 80 per cent of the Fortune 500 and covers a wide-reaching portfolio of sectors, including financial services, healthcare, retail and telecommunications. The agreement also enables Eckoh to develop its own direct sales capabilities, under the umbrella of the partnership.

Grafenia (LON:GRA 17.63p/£8.3m)

Grafenia (formerly printing.com) reported preliminary results for FY March 2014. Revenue was down 5.9 per cent to £19.4m and PBT was down 14.6 per cent to £0.76m. Net funds were up slightly to £1.40m (£1.39m). The Printing.com franchise formula continues to contract. The Printing.com Franchise Network in the UK and Ireland generated £8.2m (2013: £10.8m). This was in some part offset by the momentum gained with the Group’s ‘Software as a Service’ (SaaS) offerings, which are now generating meaningful revenue and the grant of additional master licences to exploit the technology in overseas markets. The Group now believes that the elements, centred on the Group’s SaaS capability to generate licence fees and print revenue, are in place for Grafenia to move forward and generate shareholder value but is still cautious with regard to its printing markets.

Hutchison China MediTech Limited (LON:HCM 855p / £445.04m)

Chi-Med announced that Hutchison MediPharma Limited, its majority owned R&D company, has initiated a Phase II clinical trial in non-small cell lung cancer (NSCLC) patients in China for fruquintinib (HMPL-013), its investigational small molecule agent that is designed to selectively inhibit vascular endothelial growth factor receptors (VEGFR). Preparations and patient screening began earlier this year, with the first patient dosed on 4 June 2014.90 patients will be enrolled, with top-line results expected in 2015.

MandM Direct (LON: TBC/TBC)

MandM Direct, a leading online, off price retailer which offers well-known brands (including Adidas, Converse, Diesel, Helly Hansen and UGG) at discounts of up to 75 per cent off RRP, recently announced its intention to float on AIM. MandM Direct provides a highly regarded solution for brand owners needing to clear large batches of excess stock. The Company has established local websites in the UK, Ireland, Germany, France, Austria, the Netherlands and Poland, serving 1.3m active households as at 14 May 2014. In FY14, MandM Direct reported core revenue of £118.9m and EBITDA of £10.5m, an increase of 9 per cent and 21 per cent respectively on the prior year. MandM Direct has a highly experienced senior team led by CEO Jonathon Brown, previously Online Director at John Lewis. The Board of Directors will be post IPO by Alan White, the former CEO of N Brown Group.

Max Petroleum (LON: MXP 1.16p/£25m)

Max Petroleum, an oil and gas exploration and production company focused on Kazakhstan, announced that the ZMA-E7 development well in the Zhana Makat Field has successfully reached a total vertical depth of 997 metres, encountering hydrocarbons in Jurassic sandstone reservoirs in line with expectations. The Company plans to complete the well and then place it on production as soon as practicable. The Zhanros ZJ-30 rig will next be mobilised to the Zhana Makat main camp where it will be stacked. The cost of stacking the rig is expected to be immaterial and it will ensure the rig is ready to drill the ZMA-E8 well once regulatory permission to drill the well is granted, expected in Q3 this year. The estimated total cost to drill the ZMA-E8 well is less than US$1m, in line with other wells drilled at Zhana Makat, and will be targeting a potentially significant extension of the Zhana Makat Field to the south east of the existing appraised area.

Rosslyn Data Technologies (LON:RDT 31.5p/£23.75m)

Rosslyn Data Technologies Group, a provider of a cloud-based enterprise data analytics platform, reported that it has continued to make strong progress since its Admission on 29 April this year and, as anticipated, the enhanced profile of Rosslyn as a public company has assisted in winning new business. Since the Admission, Rosslyn has signed up six new customers including: Ceva Logistics, a world leading logistics supplier; Electrocomponents, a global electrical components distributor and one of the world’s largest bottler service providers. The Group won a notable new partnership customer, Biycloud, a growing online reseller platform in Spain. Two new projects have been secured with existing multinational customers, underpinning the Group’s stated strategy of “land and expand”. As per the strategy detailed during the Admission, to strengthen its platform for growth, the Group has made significant investment into its sales, marketing and client relationship teams in the UK, US and Europe and senior new management hires have been made with the appointment of Lance Mercereau as Chief Marketing Officer and Paul Cook as Vice President Global Sales. The Board confirms that results for the year ended 30 April 2014 are in line with management expectations and that the Group expects to announce final results for the year ended 30 April 2014 during the first half of August 2014.

Sanderson Group (LON:SND 69.5p/£36.1m)

The software and IT services business specialising in multi-channel retail and manufacturing markets in the UK and Ireland reported that revenues were up 24.6 per cent to £7.94m and operating profits increased 20 per cent to £1.21m benefitting from a ‘very good sales order intake in the period, very much reflecting the investment in the sales and marketing capability and capacity which has been made during the two previous years.’ An interim dividend of 0.8p was declared up 20 per cent. The results include revenue and operating profits contribution of £0.79m and £0.15m from One iota (a leading provider of cloud-based multi-channel solutions), acquired in October 2013. The statement goes on to say that there is considerable scope for further cross-selling of products and services, driven by strong growth of mobile commerce and the Group plans to build synergies during the second half year.

Share (LON: COG 43.50p/£62.49m)

Share plc which operates The Share Centre Limited, reported in its AGM statement that the positive trends seen in the first quarter have continued into the second quarter of the year and the Company continues to trade in line with management expectations. As announced on 24 April, revenues in the first quarter of 2014 were 6.3 per cent higher than in the same period in 2013, with dealing commission up by 19 per cent year-on-year and fee income up by 2 per cent. The Company’s performance in the first quarter against benchmarked peers has also been encouraging as previously reported with the Group’s market share of peer group revenues at 7.30 per cent (2013: 7.19 per cent). The Group’s first half results to 30 June 2014 will be released on 5 August 2014.

Sphere Medical Holding (LON:SPHR 28p / £16.63m)

Sphere Medical Holding, leading developer of innovative monitoring and diagnostic products for the critical care setting, announced that the Proxima system, its patient-attached arterial blood analyser for use in intensive care and the operating room, has received CE marking under the EU Medical Devices Directive and also provides a business and trading update. previously indicated at the time of the Preliminary Results in February 2014, we expected to receive all four Proxima CE marks for the Company’s Proxima system before the end of the first half of 2014.We are pleased to announce that all four CE marks have now been received for the Proxima system, which will allow us to proceed with the Post Market Clinical Follow-up Study at the Queen Elizabeth Hospital, Birmingham and the commercial launch in 2014.Medical has continued to trade satisfactorily in the period and its financial results are ahead of the Board’s expectations.

Tricorn Group (TCN:LON 18.5p/£6.2m)

Tricorn, the tube manipulation specialist, reported final results to 31st March. As previously well flagged revenues in H2 were down vs H1. Nonetheless FY 2014 revenue as a whole was up 14.6 per cent to £24.46m largely on the back of a full year of revenue from the US acquisition completed at the end of the last financial year. Tricorn recorded a £0.34m pre-tax loss vs a profit of £1.6m. During the year, the Group continued to invest in expanding its footprint globally and also in its capabilities. Net debt was up from £1.91m to £3.38m and a final dividend was unpaid at the year-end (0.2p in 2013). The Group has restructured significantly and with facilities in the USA and China is now well established. Tricorn remains cautious over its short term prospects, but considers itself well positioned to capitalise on significant growth opportunities in its export markets.

Tristel (LON:TSTL 75.5p/£30m)

Tristel, the manufacturer of infection prevention, contamination control and hygiene products, provided a trading update for the year ending 30 June 2014, ahead of previously upgraded expectations announced in April. Tristel addresses three distinct markets: Human Healthcare, Animal Healthcare and Contamination Control, with three distinctively branded product ranges: Tristel, Anistel and Crystel. Tristel announced in both March and April that it was experiencing strong momentum in its underlying business. This trend is expected to continue through to its June year end and beyond. The Company now anticipates further acceleration in revenue growth and as a consequence has raised its internal expectations both for the current and subsequent financial years. Pre-tax profit (before share-based payments) for the year ending 30 June 2014 is now expected to be not less than £1.75m (2013: £0.48m adjusted pre-tax profit).

Zibao Metals Recycling (LON: TBC/c£7.7m)

Zibao, the Hong Kong based trader of non-ferrous metals which it sources from a global panel of suppliers and sells to customers in the People’s Republic of China, recently announced its intention to float on AIM. The Group was founded in its current form in 2009 by Joe Zhou. Joe has worked in the metal recycling industry since 1994, when he graduated from the University of New South Wales. After graduation, Joe started work sourcing suppliers for his family’s metal recycling trading businesses. In 2009, Joe refocused the activities of the Group to concentrate on suppliers and customers that were not connected to him or his family. Both Joe and his family continue to be interested in a number of metal recycling businesses which are separate from the Group. The directors consider that this gives a strong advantage to the business both in terms of providing market knowledge and in terms of developing enduring relationships with customers and suppliers. The Group endeavours to trade on a back to back basis matching individual purchases and sales and seeks to avoid taking an open position in the metals in which it trades. Generally it aims to make a 5 per cent margin on sales. The level of turnover will be affected by the inherent volatility in metal prices generally. Most of the Group’s purchases and sales are denominated in US Dollars and therefore currency risks are limited.

*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.

3rd June 2014

This week: Cello adds another string to its bow, Akers Biosciences on the march into India, DDD enters the next dimension in smartphone galleries

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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.

AKR agreement to market Rapid Tests to Indian military,CLL AGM hails strong trading and acquisition,COS new clinical trial and scientific adviser,DDD launch of TriDef 3D Gallery app,EDEN Mexican patent,EKF AGM statement and new line of women’s products,LID study results,MIRA trading update and major contract win

Avacta Group (LON:AVCT 1.13p / £56.13m)

Avacta Group, the global provider of proprietary diagnostic tools, consumables and reagents for human and animal healthcare, announced that it has secured a Smart Award from the UK’s innovation agency, the Technology Strategy Board, to support its activities in developing the Affimer technology for therapeutic out-licensing. The Smart Award will contribute towards the development of the data pack to support licensing of Affimers as therapeutic agents. The award will support the development of a high affinity Affimer targeting a key biological pathway involved in several human cancers. Targeting this pathway will allow the creation of a bio therapeutic to meet increasing demand for new drugs for the treatment of cancer. Over the next 18 months, the program of work will include lead identification, assessment of developability criteria for manufacturing and a preclinical target validation study. Alastair Smith, Chief Executive of Avacta said: “We believe that there is a significant opportunity to generate value for shareholders throughout-licensing of the Affimer technology in the therapeutic space.”

Bango (LON:BGO 110.5p/£50.5m)

Following on from the Outlook at the FY 2013 results in March 2014, Bango, the mobile payments company, has given a further update in its AGM statement. Bango reported that it is making good progress expanding its commercial partnerships with MNOs (Mobile Network Operators) around the world and during 2014 so far, has integrated twelve new MNOs with the Bango Platform. MNO integrations completed to date total 137. Bango has grown its MNO integration pipeline to a level that now represents over 50 additional MNO integrations, with more than 30 of these already underway. Bango updated on the good progress it is making in emerging markets, a key part of its strategy. The company also commented that the month-on-month an increase in End User Spend has continued since Bango last updated the market, and that this will accelerate as connections between MNOs and apps stores grow and digital content continues to expand. Bango commented that it is uniquely positioned to capitalise on the extraordinary consumer appetite for Smartphones and continuing growth of digital content and services.

Belgravium Technologies (LON:BVM 5p/£5.05m)

Belgravium Technologies, the provider of mobile on-board retail solutions, announced it has secured a key contract, worth circa EUR500,000 to supply its on-board point-of-sale (POS) solution to European airline operator. The new contract, the majority of which will be delivered in the current year, will see the airline update to the latest version of Belgravium’s retail software. Mark Hardy, Group Managing Director remarked: “We have worked with this customer in the past and we are delighted that it has returned to us and is placing its trust in Belgravium to deliver an integral part of its on-board retail solution. We are working closely with the customer to ensure that the solution is in place and operational as soon as possible so that it can continue to improve the efficiency of its daily operations and deliver an exemplary level of customer service to its patrons.”

Blue Inc (LON:BINC TBC/TBC)

Blue Inc, the male-focused UK value fashion retailer focused on the under 25’s, recently announced its intention to float on AIM. Blue Inc is one of the fastest growing UK based retailers in the young fashion market, with an expanding overseas, wholesale and online business. Blue Inc offers affordable, fast fashion with an exclusive design, to primarily male customers under 25 years of age, who are focused on style and value. The company had sales of £98.7m and EBITDA of £4.5m for the year ended 31 December 2013. The Company is seeking to raise up to £15m to provide additional funding to support its growth plans including the roll-out of a new store format, expansion of the store estate, further product development, and increasing online presence through marketing and promotional expenditure as well as negotiating improved supplier terms.

Conroy Gold & Natural Resources (LON:CGNR 1.55p / £5.46m)*

Conroy Gold and Natural Resources announced that assay results from channel sampling in trenches at its Clay Lake Gold Target in Co. Armagh have confirmed wide gold zones at surface. The results included 5 metres @ 3.02g/t gold in one trench and an overall total in all trenches of 108 metres of gold mineralisation at an average grade of 0.58g/t gold. The wide gold zones now confirmed on surface by the assay results were initially demonstrated by a follow up trenching programme to the recently completed independent structural study on the Clay Lake Gold Target. Correlation with drilling results has shown that the zones extend to depths of over 100 metres. The results are a further indication of the potential of the Clay Lake Gold Target for high tonnage and overall gold content.

EKF Diagnostics Holdings (LON:EKF 24.5p / £103.40m)

EKF Diagnostics Holdings, the point-of-care, central laboratory and molecular diagnostics business, announced the appointment of Dr Tito Bacarese-Hamilton to the Board of Directors of the Company, as Chief Technology Officer with immediate effect. Tito, aged 56, joins EKF from Diabetes specialist Life Scan Scotland Ltd, a wholly owned Johnson & Johnson franchise, where he was Vice President, R&D for New Products & Platforms. At Lifescan, Tito had global responsibility for the full-scale development and commercial launch of all new product platforms and was the main interface with manufacturing operations for the production of Life Scan’s new, multi-product sensing platforms. EKF also separately announced a major step towards detecting cancer in blood; the result of a collaboration which is a major step towards the goal of routine and reliable detection of cancer cells in blood samples. EKF Molecular Diagnostics has been working with GILUPI, an innovator in medical devices for in vivo isolation of rare cells directly from a patients’ blood stream, using GILUPI CellCollectorTM with EKF’s PointManTM DNA Enrichment technology. The first results of a collaboration between EKF Molecular Diagnostics and GILUPI has successfully demonstrated the detection of gene mutations from as few as three or less cells isolated in a model in vitro system and from the blood of lung cancer patients. PointMan DNA Enrichment was used to detect and analyse cells with known mutation status that had been collected on GILUPI CellCollectors under laboratory conditions. The known mutations were those typically seen in lung (EGFR) and colorectal (KRAS) cancer. Positive results using PointMan assays for KRAS (codon 12/13) and EGFR (T790M and L858R) from cell lines with known mutations and patients were confirmed by Sanger sequencing and showed conformance with known mutation status.

Fitbug Holdings (LON:FITB 0.6p/£1.01m)*

Fitbug has reported final results to December 2013. During 2013 the Company took some important strategic decisions. Consequently sales are down, but orders on for 2014 to date are already 60 per cent ahead of FY2013 numbers and the expanding distribution platform sets a solid backdrop for future growth. New financing arrangements demonstrate the support of Fitbug’s financial backers as it is poised to accelerate its market drive as wearable technology gains further adoption. Independent forecasts expect the market to more than double by 2017. Revenues of £749k vs £1.3m, and a loss before tax of £2.6m vs £1.4m reflecting significant investment in new product development and innovation plus a strategic decision to focus the Company’s product range on the retail consumer market where the Board believes there are substantial growth opportunities as wearable device adoption become mainstream. Sales and confirmed orders for the year 2014 to date are at £1.2m – 60 per cent higher than sales for the whole of 2013. A long list of global blue chip retailers are stocking the product. Ten distribution partners have been appointed since January 2014.

Magnolia Petroleum (LON:MAGP 1.25p/£11.38m)

Magnolia Petroleum, the US onshore focused oil and gas exploration and production Company, provided an operations update announcing six new wells. Rita Whittington, COO of Magnolia, said, “Parmley’s initial production rates and high level of oil content continue the run of excellent results for wells producing from the Woodford formation in which Magnolia has an interest…We expect to quickly recover our share of the costs of drilling Parmley, even after taking into account decline rates. In line with our strategy, revenues generated from Parmley will be reinvested, alongside our recently increased credit facility, into further drilling activity to prove up the reserves on our leases in US onshore plays. As demonstrated by the six new wells announced today, we are not short of investable drilling opportunities and we continue to receive multiple proposals to drill wells in Oklahoma targeting both the Mississippi Lime and Woodford formations. I look forward to providing further updates on our progress in due course.”

Marimedia (LON:MARI 155p/£95m)

Marimedia, the Israeli based provider of proprietary technology solutions, recently announced its first day of dealings 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 raised £29.8m ($50m) before costs and expenses via the placing of new and existing shares at a price of 153 pence.

MediaZest (LON:MDZ 0.28p / £2.56m)*

MediaZest, the creative audio visual company, announced the successful completion of its largest ever contract, with end client The Coca-Cola Company. Under the contract, the Company supplied large scale audio-visual installations for the FIFA World CupTM Trophy Tour presented by Coca-Cola, in 48 countries over the last 8 months working closely with brand experience pioneers, Ignition Inc. Geoff Robertson, CEO of MediaZest: “The first five months of 2014 have naturally been dominated by delivery of such a project but the Board looks forward to updating shareholders on trading and a wide range of other activities that have taken place since September 2013 in due course.”

Molins (LON:MLIN 170.5p/£34m)

Molins, the international specialist technology and services group, recently announced its intention to move from the main market of the LSE to AIM. The Company’s strategy is to grow organically across its three divisions – Scientific Services, Packaging Machinery and Tobacco Machinery – and by selective acquisitions, consistent with a diversified industrial strategy. The Board believes that a transfer to AIM has the benefit of lower transactional costs, lower ongoing costs and simpler administration and regulatory requirements more appropriate to a company of Molins’ size, which will facilitate implementation of the Company’s plans for the next stage of its growth and will enable the strategy to be executed in a more efficient manner. The Cancellation on the Main Market is expected to become effective at 8.00 a.m. on 19 June 2014 and Admission to AIM is expected to become effective at 8.00 a.m. on the same date.

MYSALE (LON:MYSL TBC/TBC)

MYSALE, a leading online retailer with established flash sales sites in Australia, New Zealand and South-East Asia and an expanding international presence in the US and UK, recently announced its intention to float on AIM. MYSALE operates within the e-commerce online retail market, conducting limited time flash sales events to a closed member base. The online flash sales market is fragmented, however key online flash sales retailers are emerging within single geographies and are potential participants for industry consolidation. The Directors believe MYSALE is the first global online flash retailer of scale, offering a unique opportunity to vendors and members. Revenues for the year ended 30 June 2013 increased by 63.7 per cent to A$183.6m compared with the period ended 30 June 2012. Adjusted EBITDA for the year ended 30 June 2013 was A$8.9m compared with A$3.7m in the year ended 30 June 2012.

North American Petroleum (LON:NAPP 0.8p/£3.85m)

North American Petroleum, a company focussed on developing its interests in proven US onshore oil and gas formations, announced its final results for the year ended 31 December 2013. NAP acquired its first interests in wells in April 2013, while first revenues were not received until the second half of the year. As a result, modest revenues of £105,384 were booked by the company during the year under review and a loss of £215,216 is being reported for the full year. Administrative expenses totalled £316,234 for the year, a reflection of the low cost structure of the business which ensures as much capital as possible is available to acquire and develop leases. The company has no employees other than the directors, who did not receive any salary during the year. NAP’s Chief Executive Stefan Olivier said, “… the acquisition of 1,067 net mineral acres in Oklahoma with proven reserves of US$21m; our participation in the drilling of wells alongside established operators such as Devon Energy; and us ending the year with interests in 32 wells. The year ahead promises more of the same. Already through the acquisition of a 30 per cent interest in Zink Ranch we have increased our net acreage by half to 1,523 and our well count to 47. These figures will increase further subject to the completion of a 35 per cent interest in the producing Shoats Creek field in Louisiana. Importantly our production and revenues are set for strong growth this year thanks to our participation in an on-going multi-well development programme that will include workovers of existing well bores and new drilling activity. 2014 will not be short of high impact newsflow and I look forward to providing updates on our progress over the course of the year.”

Proxama (LON:PROX 4.75p/£38.44m)

Proxama the mobile marketing, loyalty and mobile payment company announced that TapPoint(R)is being used for the launch of Ubisoft’s(R) new game Watch Dogs(TM) using Near Field Communication (NFC) proximity marketing technology and QR codes to incentivises gamers who “tap-in” and interact with the brand using their smartphones, for a chance to win a trip Chicago. The six week marketing campaign has been launched across selected GAME retail stores in the UK for the launch of Watch Dogs(TM), featuring a competition asking customers to tap-in to decrypt a message to have a chance at winning a holiday to Chicago, USA. Promoted in-store using point-of-sale promotional material, the solution will use Proxama’s TapPoint(R) platform as the underlying platform, which will also provide Ubisoft with valuable data about the marketing campaign’s success.

RapidCloud International (LON:RCI 70.5p/£12.3m)

The Southeast Asia based software solutions provider offering subscription services through all segments of cloud computing issued its first set of results (FY Dec 2013) since the August IPO. Revenues were up 21 per cent to approximately £2.1m (translated from Malaysian ringgits). Operating profit was up 31 per cent to approximately £0.9m. Pre-exceptional net profit after tax increased by 18 per cent to circa £0.8m. The company declared a final dividend of approximately 0.6p. Looking ahead RCI’s sales force has been expanded through new hires, including a new head of sales, and the company has extended its geographic reach, establishing a presence in Indonesia. The company stated that “a growing pipeline of opportunities gives us confidence in delivering further strong growth during the year ahead.”

Scancell Holdings (LON:SCL 35p / £78.73m)

Scancell Holdings, the developer of novel immunotherapies for the treatment of cancer, announced further encouraging results from its on-going Phase 1/2 clinical trial in patients with Stage III/IV melanoma treated with the SCIB1 ImmunoBodyÒ. The updated data was presented in a poster at the 2014 American Society of Clinical Oncology (ASCO) meeting in Chicago on Sunday 1 June 2014.The Phase 1/2 trial is an open label, non-randomised study to determine the safety and tolerability of four dose levels of SCIB1 administered intramuscularly using an electroporation device. While the primary objective of the study is to access safety and tolerability, the secondary objectives are to evaluate cellular immune responses and to assess any tumour response. In conclusion, while this is a Phase 1/2 clinical study and patient numbers are relatively small, there is consistent evidence emerging from this trial that Scancell’s SCIB1 ImmunoBody® therapy can produce a reduction in tumour load as well as inducing a powerful immune response in late-stage melanoma patients. When taken together with the apparent delay in disease progression and increasingly extended survival data, these results are highly encouraging and clearly warrant the continued development of SCIB1ImmunoBody® as a potentially powerful new addition for the treatment of this disease.

Starcom (LON:STAR 13.125p/£11.1m)

Developer of wireless solutions for the remote tracking, monitoring and protection of a variety of assets and people provided a trading update ahead of its AGM. Trading in the first quarter of the year has been slow, partly due to the loss of revenues anticipated from the Ukraine, as announced on 21 March 2014, and also as the Company works to generate traction for new products being introduced into the market, such as Helios TT, Triton 2 and Kylos. These new product lines are being well received in the market and should lead to further revenues later in the year. In general, as stated previously, the Board anticipates revenues to be weighted to the second half of the year. Specifically the company refers to a $1.8m contract over three years with a new customer, a Guatemalan distributor.

*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.