Small Cap Wrap: Month: September 2014

AIM Breakfast - Archive

25th September 2014

We have recently joined the world of Twitter, feel free to follow us @hybridanllp

Investors raise a glass to Chapel Down, all smiles at Milestone, and all woe at Mo-Powered

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.

OPM final results and fundraising,CDGP additional placing to raise approximately £0.57m,EKF US research collaboration,HZD interim results,JWNG trading update,LGT interim results,MSG agreement with Intervictus,MPAY interim results,MONI VISA stake,MPOW placing & interim results,NAH interim results,NETD interim results,SAR CHK1 Patent Update,SWL final results,SYQ update,XLM interim results

1pm (LON:OPM 67p/£20.08m)

The independent provider of finance facilities to the SME sector announced final results for the year ended 31 May 2014. Highlights included revenues up 35.6 per cent to £4.2m, profit before tax up 73 per cent to £1.35m with £11.3m of new funding raised (FY13: £4.1m).Bad debts and provisions as a percentage of the portfolio stood at 6.6 per cent (FY13: 8.97 per cent). EPS was up 36.2 per cent to 3.54p (FY13: 2.60p). The Board has recently adopted ambitious, but robust and risk-assessed plans aiming for significant growth over the next three to four years, which are intended to result in the combined portfolio reaching approximately £75m. Trading in the current year has commenced satisfactorily and is ahead of the equivalent period last year. In overall terms the current financial year is now expected to be a year of modest growth as the platform for future significant growth is established. The company also announced a share issue to raise a total of up to c.£4.016m (before expenses) by way of an oversubscribed placing at 61 pence per share to raise £3m (before expenses); and an Open Offer to raise up to £1.016m (before expenses).

Chapel Down Group (LON:CDGP 29.5p/£25.37m)

Chapel Down Group, announced that it has raised an additional £0.57m (before expenses) at 28 pence per share. This is in conjunction with the ongoing equity crowdfunding campaign launched on 8 September 2014 – the full details of which can be found at www.chapeldown.com. The total raised as at midday 22nd September was £3.6m, well in excess of the initial minimum of £1.7m. The amount raised through the crowdfunding platform Seedrs in the first five days was £1.9m. The new funds will be used to enable Chapel Down to satisfy increasing demand for its award winning products. Funds will be used to plant more vines, build a new winery, construct new distribution and storage facilities, build a brewery and a visitor attraction and extend the hospitality at the headquarters in Tenterden. The new ordinary shares being issued in respect of the crowdfunding, will be issued on the earlier of either the maximum (€4,999,99.99) being reached, or 14 November 2014.

EKF Diagnostics Holdings (LON:EKF 24p / £101.29m)

EKF Diagnostics Holdings, the point-of-care, central laboratory and molecular diagnostics business, announced that it has entered into a two year research collaboration with Massachusetts General Hospital (MGH), a global leader in successfully bridging innovative science with state-of-the-art clinical medicine, to develop PointMan assays that can effectively detect treatable cancer mutations in blood. MGH will use PointMan DNA enrichment technology for the detection of genetic variation in circulating tumour cells (CTCs) isolated from a patient’s blood using MGH’s CTC-Chip instrument. CTCs are shed by primary tumours allowing the cancer to metastasise. CTCs are extremely rare in whole blood and their isolation and characterisation could offer clinicians a routine method with which to diagnose, treat and monitor the progress of various cancers. The main difficulty in successfully analysing CTCs has been the ability to detect low level mutations sufficiently and to create assays that are sensitive enough to provide meaningful data; difficulties which PointMan may be able to effectively overcome. EKF Molecular will design and develop high sensitivity assays which will be utilised by MGH with a view to clinically validating PointMan in the detection of existing and novel mutations, a major step towards the improvement of patient outcomes in the hospital.

Horizon Discovery Group (LON:HZD 162.5p/£109.31m)

Horizon Discovery Group, the international life science company supplying research tools to organisations engaged in genomics research and the development of personalised medicines, recently announced its interim results for the six months ended 30 June 2014. Since the Company’s AIM IPO in March, they acquired Horizon CombinatoRx in June 2014 for £4.74m and signed distribution agreements with Haplogen Genomics GmbH and Sirion Biotech GmbH giving access to over 9,000 new cell line and related products. The company had revenues of £4.06m for the six months ended June 30, up 36 per cent (HY13:£2.98m) and an operating loss of £2.55m (2013:£1.73m).

Jaywing (LON:JWNG 29p/£21.61m)

Jaywing, the data driven insight and creative business, confirmed that trading year to date has been in line with management’s expectations. Longer term, prospects remain encouraging following the recent strategic re-structuring and repositioning of its business. It also announced the appointment of Ian Robinson as Chairman effective from the conclusion of the AGM to be held today. At the same time, Stephen Davidson will become Deputy Chairman.

Lighthouse Group (LON:LGT 4.13p/£5.27m)

The provider of financial advice to personal and corporate clients through specialist advisers located throughout the UK announced interim results for the six months ended 30 June 2014. Revenue is stable at £23.4m; with average annualised revenue production per adviser having increased 3 per cent to £83,000. Operating costs were down £1m (14 per cent) to £6.4m, EBITDA was up from £51,000 to £436,000, profit before taxation equalled £88,000 (2013: loss before taxation of £232,000) and earnings per share came to 0.07p (2013: loss per share 0.20p). LGT returned to the dividend list with an interim dividend of 0.06p per share. On the outlook, the Board continued to address market and regulatory change and is implementing strategies for future growth, whilst improving the cost efficiency of the Group. The Board believes that the Group is well placed to take advantage of opportunities within what remains a fast evolving market place and is on schedule to meet market expectations for 2014.

Milestone Group (LON:MSG 0.95p / £5.26m)*

Milestone, the provider of digital media and technology solutions announced that it has signed an agreement with Intervictus (UK) Ltd to provide mobile solutions to support the installation and monitoring of their Energy Management Solutions. Intervictus specialises in the supply of Energy Management Solutions, offering bespoke and comprehensive real-time energy monitoring systems that enable companies to manage all aspects of energy usage. The Intervictus offering will combine the emotional intelligence training in all training courses for new employees sourced via Milestone, the Passion Project and / or any associated introductions. The initiative has a pilot commencing in October 2014 with a London Housing Association whose current housing stock comprises of 9,000 dwellings. Following the pilot, it is anticipated that the programme will be rolled out across all the properties and interest is already being shown by a number of other housing associations in the UK. It is anticipated that the delivery model to survey and install into the 100 homes for the pilot would see 14 individuals being recruited and trained. Post successful pilot, it is anticipated that this number would increase to 200 – 250 delivery personnel. The financial details of the agreement will see Milestone generating revenues from the mobile solutions provided at a rate of £20 per user per month, Passion Project engagement fees of £50 per young person, £350 per person for emotional intelligence training.

Mi-Pay Group (LON:MPAY 39p/£13.25m)

Mi-Pay Group, a provider of mobile payment solutions to Tier 1 Mobile Network Operators and Mobile Virtual Network Operators, presented its interim results for the six months ended 30 June 2014. Revenues from continuing operations were £1.4m (H1 2013:£1.6m) reflecting a client contract ended in 2013. Gross margin were 45 per cent (H1 2013: 52 per cent) reflecting a change in the sales mix. An operating loss of £3.0m (H1 2013: £0.8m) reflecting the increased costs (of around £1.5m) related to the listing transaction and business integration costs. Cash & cash equivalents of £2.2m (H1 2013: £0.8m) were recorded.

Monitise (LON:MONI 35.625p/£702m)

Monitise confirmed that Visa Inc. (NYSE:V) has announced the appointment of JP Morgan to assist in the undertaking of an assessment of Visa’s Inc. investment stake in the Group. Visa Inc. has stated that its assessment is “consistent with Visa’s investment practice to seed emerging players and, over time, taper that influence as the partner company grows.” Visa Inc.’s disclosed shareholding is a 5.5 per cent stake in Monitise. Monitise continues its alliance with Visa Inc. and reiterates it guidance for this financial year, its expectation to be EBITDA profitable in FY 2016 and its longer-term guidance for 2018. The group’s latest full-year results were published on 15 September 2014.

MoPowered Group (LON:MPOW 6.25p/£994k)

MoPowered Group announced it has conditionally raised approximately £3.50m through the issue of 70m new shares by way of a Placing and Subscription at an Issue Price of 5 pence, which represents a 75.31 per cent discount to the closing middle market price of 20.25 pence per Ordinary Share on 19 September 2014. It is proposed that the net proceeds will be used to strengthen the Company’s balance sheet and accelerate growth through investment in sales. A General Meeting will be held at 10.00 a.m. on 8 October 2014. Overall revenues increased to £753,204 in the period to end June 2014, 39 per cent higher than the same period in the previous year. The rate of new client acquisition was softer than expected in the second quarter of 2014, which led to the board’s adjustment of whole-year expectations in early July. Configuration fees from new clients were significantly lower than had been originally anticipated at £45,874. Gross margin was put under pressure by longer-than-expected project deliveries in the first half of the year. Overall general and administrative costs less share based payments in the Group increased, by 49 per cent year-on-year to £2.2m. Actions have already been taken to reduce the cost base by around £100,000 each month. Adjusted loss before interest, tax, depreciation, amortisation and share-based payments widened to £1.53m (2013: £0.94m). The Group had cash reserves at the end of the half-year of £647,797.

NAHL (LON:NAH 195.5p/£80.45m)

NAHL, a UK consumer marketing business focused on the UK personal injury market, advertising through its core brand – National Accident Helpline, recently announced its maiden interim results for the six months ended 30 June 2014. Revenues increased by 6 per cent to £22.1m whilst operating profit increased by 25.8 per cent to £6.1m. Having been established in 1993, the Group’s business has grown to become the largest outsourced marketing services provider to the personal injury market – a market which is valued at approximately £3bn in fees generated mainly by law firms. NAHL’s core business model is based on enquiry origination through direct response marketing, connecting claimants who have been injured in non-fault accidents with specialist law firms.

NetDimensions (LON:NETD 70.75p/£27.38m)

The global provider of performance, knowledge, and learning management systems announced its interim results for the period ending 30 June 2014. Highlights included a 40 per cent GAAP revenue growth to US$9.1m, invoiced sales growth to US$9.1m, a 38 per cent increase in deferred revenue to US$7.6m, and a 50 per cent GAAP revenue growth in the global hosted secure Software as a Service offering to US$3.9m. Adjusted losses were US$2m versus US$2.7m. Cash used in operating activities was US$0.9m in the period (2013 H1:US$1.5m) as improvements in working capital helped to offset the impact of the loss. The Group’s cash balance remained healthy at US$7.1m (2013 H1: US$10.2m). These numbers reflect the success of the business plan implemented last year. The Investment phase for this has now been substantially completed such that the Company is well positioned to benefit from the many identified opportunities within its target markets. The Board will now focus on driving additional growth both organically and by selective acquisitions and we are confident of achieving further successes going forward. NetDimensions is performing in line with current consensus analyst expectations and, with the Company gaining momentum, the Board expects further growth going forward.

Sareum Holdings (LON:SAR 0.465p / £8.88m)*

Sareum, the specialist cancer drug discovery and development business, announced that the European Office has issued notification of a grant of a patent for one of the inventions associated with the CHK1 cancer programme. The patent describes compounds that inhibit CHK1 kinase enzyme function and their potential to treat cancer, when administered alone or in combination with chemotherapy or radiotherapy. The CHK1 cancer programme is a co-development collaboration between the Cancer Research Technology Pioneer Fund, Sareum and BACIT Ltd. This patent, which has also been granted in the USA, is part of a wide intellectual property estate which, if granted in its current form, would provide broad geographical protection for the CHK1 programme.

Swallowfield (LON:SWL 95p/£10.74m)

The full service provider for global brands and retailers operating in the cosmetics, personal care and household goods market reported final results for the year ended 30 June 2014. The business returned to profitability in the year, as planned. Adjusted operating profit was £0.77m, a significant improvement on the 2013 operating loss of £0.45m. Adjusted earnings per share was 3.9p compared with a loss per share of 4.7p in the prior year. Revenues for the 53 weeks were £50.0m, £49.1m on a 52 week basis (2013: £48.6m) with the prior year including £2.0m of sales lost through the previously advised changes in the sourcing strategy of two significant customers. Good underlying sales growth of 7 per cent (52 weeks 5 per cent) was achieved across the balance of customers, as a result of good innovation and new contract wins. Swallowfield expects the challenging retail market conditions currently being experienced in the UK and Europe to continue in the short and medium term. However, the Board remains confident that the new strategy outlined earlier this year will gain further momentum, improve profitability and continue to build shareholder value. In addition, the new financial year will benefit from improved run rate profitability, further efficiencies, tighter control of working capital and new product developments already progressed in the current financial year.

SyQic (LON:SYQ 61.5p/£16.54m)

SyQic, the OTT provider of live TV and on-demand paid video content across mobile and internet enabled consumer devices, recently announced the receipt of the February 2014 payment from PT Nextnation Prisma (PTNP), the completion of its acquisition of Maaduu and the activation of a mobile phone payment service for its Yoonic Over The Top (OTT) direct to consumer platform. SyQic has received the February 2014 payment of approximately £280,000 from the Company’s major Indonesian telco customer, PTNP. As announced on 13 June 2014, PTNP had previously confirmed to the Company that 2014 billings will not be on a payment plan and will be paid much more promptly. The receipt of the February 2014 brings the total sums received from PTNP in respect of 2014 revenues to approximately £630,000. In addition, the Company has completed its acquisition of Maaduu, an online video-on-demand service providing Korean content across multiple devices that is advertising supported. The board also anticipates that the activation of a mobile payment service for its OTT offering will complement Yoonic’s current scratch-card payment method providing a simple process by which customers can pay for content directly via their mobile phones. The new payment service is expected to help facilitate the proliferation of the Yoonic TV service into new markets globally.

XLMedia (LON:XLM 54.5p/£103.36m)

XLMedia announced its interim results for the six months ended 30 June 2014. Revenues increased 24 per cent to $19.9m (H1 2013: $16m), gross profit increased 10 per cent to $11.3m (H1 2013: $10.3m) but Adjusted EBITDA was $6.4m (H1 2013: $7.2m) reflecting increased investment in line with the strategy to generate future growth. The cash balance was $56.6m (June 30, 2013: $4.2m). An interim dividend of $3m was declared, equating to $0.0158 per share.

*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.

18th September 2014

Hybridan’s Niall Pearson did an interview for Proactive Investors covering IPOs and the biotech sector. Please see link:

http://www.proactiveinvestors.co.uk/companies/stocktube/3077/hybridans-pearson-on-record-breaking-year-for-aim-3077.html

This week: Plethora seals Italian Job with Recordati, MX Oil charging forth in Mexico, Gigaclear looks for fibre optic reception from AIM

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.

AMBR interim results,BOO half year trading update,CDOG interim results,CFU operations update,Gigaclear intention to float on AIM ,MXO disposal of investments,NPT interim results and directorate changes,PLE licensing agreement with Recordati,PROX statement re WEVE,SCIYS contract win,STEL diamond processing plant,THAL interim results,TRAK deal with SAGAsystem

Ambrian (LON:AMBR 11.63p/£12.42m)

Ambrian, which is primarily active in the physical trading of base metals, reported results for the six months ended 30 June 2014. Highlights included profit before tax of US$1.17m (H1 2013: US$ 1.31m), net profit per share of US 0.81 cents (H1 2013: US 0.81 cents), total equity as at 30 June 2014 of US$ 29.88m (31 December 2013: US$ 28.96m) and net asset value per share as at 30 June 2014: of 29.7 cents (31 December 2013: US 28.8 cents). Commenting on the results, Charles Crick, non-executive Chairman, stated: “The interim results reflect a solid performance in our metals trading activities for the period. Current market conditions affecting the metals in which we deal are challenging, but we remain confident in our business model and of a successful outcome for the year”.

Boohoo (LON:BOO 44.25p/£497m)

boohoo.com, an online, own brand fashion retailer announced a trading update ahead of its interim results for the six months to 31 August 2014. Revenue for the half year is approximately £67m, up 31 per cent compared with the same period last year or 36 per cent on a constant currency basis (CER). Revenue growth during the first half has continued to accelerate in line with management expectations with second quarter revenue growth of 37 per cent or 41 per cent CER up from 24 per cent and 28 per cent respectively in the first quarter. Improvement in growth was seen across all regions during Q2 with the UK up 50 per cent, the Rest of Europe up 61 per cent CER (50 per cent reported) and the Rest of the World up 8 per cent CER (zero per cent reported). The interim results will be released on 14 October. The Company confirmed that it continues to trade in line with expectations for the full year to 28 February 2015. The Company will issue its interim results on Tuesday 14 October 2014.

CDialogues (LON:CDOG 285p/£17.79m)

CDialogues, the provider of mobile marketing solutions to Mobile Network Operators (MNOs), announced its unaudited interim results for the six months ended 30 June 2014. Revenues were up 106 per cent to EUR4.05m (1H 2013: EUR1.96m). Subscription revenues accounted for 79 per cent of total revenues (1H 2013: 80 per cent) and EBITDA was up 104 per cent to EUR1.44m (1H 2013: EUR0.70m). Net cash was as of 30 June 2014 EUR1.75m (FY 2013: EUR0.64m). The total mobile subscriber base is now 31m customers (31 March 2014: 15m).

Ceramic Fuel Cells (LON:CFU 0.65p/£16.4m)

Ceramic Fuel Cells Limited, a developer of generators that use fuel cell technology to convert natural gas into electricity and heat for homes and other buildings, announced that it had achieved an important technical and commercial milestone. On 11 September its service partner, Eneco, commissioned a BlueGEN unit in the Netherlands, representing the 500th unit in the installed and commissioned fleet of systems based on the Company’s world leading SOFC technology. Earlier this month, the fleet passed the milestone of 5 million accumulated operating hours and demonstrated high levels of reliability and availability. According to available industry information this makes CFU the first fuel cell company outside Japan to achieve this number of mCHP installations and accumulated operating hours. In the Company’s initial core markets in Europe, CFU is leading the commercialisation of fuel cell based mCHP in terms of number of systems installed and accumulated operating hours.

Gigaclear (TBC/TBC)

Gigaclear, a provider of ultrafast fibre-to-the-premises networks to rural communities, recently announced its intention to float on AIM. Gigaclear is a provider of fibre-to-the-premises (FTTP) networks to rural communities. Gigaclear’s networks, which are built with new gigabit fibre optic cable, provide significantly higher speeds to these rural communities than are available with existing internet delivery technologies and in many instances significantly faster than average urban speeds. Gigaclear’s network build out is focused on areas where there is no availability of FTTP and where the main alternative is an existing ADSL copper-based network. Other technologies (fibre-to-the-cabinet (FTTC), 3G/4G, Wifi or satellite dishes) are inferior for speed and reliability and often do not represent attractive long-term solutions. Gigaclear sells directly and also through third parties to domestic and business users, charging them for the initial connection as well as billing a monthly charge. Depending on the tariff chosen, Gigaclear offers symmetric speeds of between 50 Mbps and 1 Gbps, with an additional option for high volume users of up to 10 Gbps. The Company’s basic 50 Mbps tariff is broadly comparable in price to the cost of premium superfast services from other providers, but is deployed in areas where those other services are not generally available.

MX Oil (LON:MXO 4.575p / £6.16m)*

MX Oil, the AIM quoted oil and gas investment company focused on the re-opening Mexican energy sector, announced it has disposed of certain investments totalling approximately £400,000, in order to reinvest the funds pursuing its investment interests in Mexico. Mexico’s energy industry is being reopened to the private sector to attract greater foreign investment and expertise to develop its substantial hydrocarbon reserves. MX Oil is in the process of incorporating its joint venture company with Geo Estratos. Pursuant to the joint venture arrangement, the Company intends to invest US$1m of debt into JVco to fund its share of the costs associated with an investment in the region. This will comprise 100 per cent of the sale proceeds plus additional cash from the balance sheet. The Company is currently in discussions with Pemex, the state owned national oil company, with regards to making an application for a Production Sharing Agreement and licences in respect of the three assets in Mexico as announced on 1 August 2014. The Company expects to make its investment shortly and a further announcement will be provided in due course.

NetplayTV (LON:NPT 11p/£32.6m)

NetPlay TV, the interactive gaming company, announced its interim results for the six months ending 30 June 2014. KPIs included a 24 per cent increase in new depositing players to 40,585 and a 29 per cent increase in active depositing players to 62,356. Net revenue grew from £14.2m to £14.5m but EBITDA fell to £2.2m from £2.7m. The interim dividend was increased 22 per cent to 0.22p. The Group reported a fall in average revenue per active depositing player ARPU) in the period, due principally to unsustainable promotional activity in the industry. In H2 the launch of new software will allow the Group’s CRM teams to react to player trends earlier allowing them to increase the player life time and in turn value. The sports book which was acquired as part of the Vernons acquisition is gaining traction and while the contribution is currently relatively low there is an opportunity for this part of the business to grow rapidly especially once the mobile application and website is launched. Clive Jones, the Non-Executive Chairman has stepped down. After four years as Chief Executive of Net Play TV, Charles Butler will become Non-Executive Chairman where he will continue to work alongside the rest of the Executive team in supporting them to drive the business forward. He is stepping down from his position as CEO to pursue other opportunities. Bjarke Larsen, Commercial Director will become the Interim CEO while the Board conducts a search for a new CEO.

Proxama (LON:PROX 3.625p/£29.33m)

Proxama has noted media reports concerning Weve, the joint venture owned by EE, O2 and Vodafone and the suggested intention to reduce its activities to develop its mobile wallet operations and informs shareholders that this event will have no adverse or material impact on the financial performance of the Company. On February 18, 2014 it was announced that Proxama had been selected as a partner by Weve in the development of this activity and that TapPoint(R) platform would form the technology foundation for “Pouch” Weve’s Alpha Loyalty service. Since that time, a number of changes in technology have occurred including the advent of HCE (Host Card Emulation) technology meaning banks can now keep control of NFC payment security, without the need for a network operator’s SIM-card based security. Additionally there have been major challenges around the network operator pricing model. Whilst this may negatively affect the prospects for Weve, it has significantly broadened the opportunities for Proxama who is dealing directly with multiple banks and financial institutions to launch cross operating systems, cross card schemes and NFC payment wallet solutions.

Plethora Solutions Holdings (LON:PLE 10.625p / £45.68m)*

Plethora Solutions Holdings announced that it has entered into a license agreement with Recordati, an international pharmaceutical group, granting Recordati the rights to commercialise PSD502™, Plethora’s novel treatment for premature ejaculation, in Europe, Russia, the Commonwealth of Independent States (C.I.S), Turkey and certain countries of North Africa. Plethora will retain full commercialisation rights for PSD502™ for the Rest of the World, including but not limited to the US and Canada, Latin America, the Asia Pacific region, the Middle East and Sub-Saharan Africa. Under the terms of the license agreement Plethora will receive a payment of €5m on the date on which the agreement becomes effective; a payment of €6m upon grant of variant approval from the European Medicines Agency for a new six dose can; a payment of up to €10m in total upon first commercial sales of PSD502™ in France, Germany, Italy, Spain and Portugal (being payment of €2m for each of these 5 countries); up to €25m in aggregate in sales; and tiered percentage royalties on net sales, ranging from the mid-teens to the mid-twenties for 10 years from first commercial sale, and thereafter at a single digit percentage royalty rate. The license agreement shall be effective from the date upon which agreements terminating the existing licensing and patent agreements with Shionogi, Paul Royalty Fund Holdings II and Dr Richard Henry (further details of which are set out in the Company’s announcement dated 29 August 2014) have become wholly unconditional, provided that this takes place by 30 September 2014. The final completion condition of the Cessation Agreements and Patent Transfer Agreement is receipt of funds. This completion condition is expected to be met shortly after announcement of completion of the Placing & Subscription and the Regent Pacific Subscription (as defined in Plethora’s announcements made on 29 August 2014), which is expected to occur on 19 September 2014 and a further announcement will be made by the Company in this respect.

SCISYS (LON:SSY 93.5p/£27.12m)

SCISYS, a supplier of bespoke software systems, IT based solutions and support services to the Media Broadcast, Space, Government and Defence and Environment sectors – recently announced that it has signed a contract with Airbus Defence and Space Ltd to deliver the rover vehicle visual localisation flight software (VISLOC) for the European Space Agency’s 2018 mission to Mars. The VISLOC software is responsible for self-localising and navigating the rover on the Mars surface and is therefore an essential part of the overall software system. The European Space Agency (ESA) established the ExoMars programme to investigate the Martian environment and to demonstrate new technologies paving the way for a future Mars sample return mission in the 2020s. As part of ExoMars ESA will in 2018 launch, land and operate a robotic rover to explore the planet. The value of this contract to SCISYS is €2m, with the significant majority of the contract value to be recognised in the current and forthcoming accounting periods up to early 2017.

Stellar Diamonds (LON:STEL 1.4p/£9.77m)

Stellar Diamonds, a diamond development company focused on West Africa, recently announced that commissioning testing of its 100tph DMS plant at the Baoulé kimberlite project in Guinea has commenced ahead of trial mining which is targeted for October 2014. Over the past three months Stellar has relocated its processing plants and earth moving machines from its Mandala alluvial mine and Droujba kimberlite project in Guinea to the Baoulé site. These have been re-constructed to establish an integrated kimberlite processing plant that can process both weathered and fresh kimberlite material from the five hectare kimberlite pipe. The objective of this programme is to collect and process a minimum 100,000 tonnes of kimberlite over the coming year to determine the diamond grade and value of the pipe. Furthermore, such a large sample will establish the presence and quality of large stones in the pipe. As part of this exercise, any diamonds produced will be sold into the market and generate cash flow.

Thalassa Holdings Limited (LON:THAL 134.5p/£34.0m)

The Company announced its financial results for the six months ended 30 June 2014. Group Revenue came in at US$9.3m versus US$11.6m in 1H 2013. Group Gross Margin increased to 43.7 per cent from 33.5 per cent in 1H 2013 due to a change in revenue mix, improved equipment utilisation and increased pricing on seismic activities. Adjusted Group Net Profit came in at US$1.2m versus US$1.0m in 1H 2013 (excluding R&D costs at Autonomous Robotics (previously GO Science) of US$0.5m) and book value per share up 80.2 per cent to US$2.09 (£1.23) versus US$1.17 (£0.76) in 1H 2013 with no debt and cash of US$21.2m (1H 2013: US$16.8m).

Trakm8 Holdings (LON:TRAK 77p/£22.25m)

Trakm8, the telematics and data supplier to global markets, announced that it has signed a contract with Norwegian company SAGAsystem AS (SAGA) to distribute the T8 tracking units and real time driver behaviour feedback product, eco(N) throughout its network in Scandinavia, representing a new territory for Trakm8. The initial order for the UK manufactured hardware is worth over £270,000, which will be followed with ongoing monthly service charges for each unit, providing a solid recurring revenue base for the Group. The initial order is expected to be delivered to SAGA by the end of 2014.

*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 September 2014

This week: Petards on the right tracks, Heavenly results from HaloSource, Crossrider galloping towards AIM

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.

BRY interim results,CAM move to AIM,CTI interim results,CLNR interim results,Crossrider Intention to float on AIM,GFM interim results,HAL interim results,KLBT final results,MED first day of dealings,MDZ final results,PEG interim results,SCLP final results,SDM half yearly report,SNTY further integrations & results and Board appointments, SVR trading update, SULA update

Brady (LON:BRY 78p/£63.56m)

Brady, the global provider of trading and risk management solutions for metals, recycling, energy and soft commodities, announced its interim results for the six months to 30 June 2014. Ten significant new licence sales were signed in first half of the year (H1 2013: six). Revenues were up 5 per cent to £15.6m (H1 2013: £14.9m). At consistent currency rates revenues up 12 per cent to £16.7m (H1 2013: £14.9m). EBITDA was up 131 per cent to £3.0m (H1 2013: £1.3m) and EBITDA margin for the first half improved to 19 per cent (H1 2013: 9 per cent). PBT grew to £1.5m (2013: loss £0.1m).

Camellia (LON:CAM 9853.5p/£272.15m)

Cameillia, the holding company operating across the agriculture and horticulture, engineering, food storage and distribution and private banking and financial services divisions, recently announced its intention to move to AIM from the Luxembourg Stock Exchange. The Group employs approximately 75,000 people globally. The Group also holds investments comprising listed and unlisted securities, fine art, philately, documents, manuscripts, land and property. The agriculture and horticulture division is engaged in the production of tea, edible nuts (macadamias, pistachios and almonds), citrus fruits, avocado, rubber, forestry, viticulture, cattle, other horticultural produce and general farming (maize and soya). The engineering division is engaged in precision engineering, cutting and grinding, fabrication, heat treatment, galvanising, powder coating and manufacture of stables, etch inspection and catalysts. These businesses are predominately UK based and serve customers in a number of sectors including the offshore oil and gas and aerospace sectors. The food storage and distribution division is involved in frozen, chilled and ambient temperature food supply chain management providing cold storage, refrigerated transport and production support to several leading UK food manufacturers. The banking and financial services division comprises Duncan Lawrie, which provides an integrated suite of banking services, financial planning, investment management and trust and estate advice. The head office of Duncan Lawrie private bank is in London, with offices in the Isle of Man, Bristol and Wrotham.

Cathay International Holdings (LON:CTI 36p / £133.58m)

Cathay International Holdings a leading investor and operator in the growing healthcare sector in the People’s Republic of China, announced interim results for the six months to June 2014. Revenue grew by 39.2 per cent to $74.7m and operating profit increased by 170.9 per cent to $9.5m. Net profit attributable to owners of the parent was $0.2m, a turnaround from last period (2013 H1: loss of $3.1m). Commenting on the interim results, Mr. Lee Jin-Yi, CEO of Cathay International Holdings Limited, said: “Despite the slower growth in China in the first half of the year, Cathay has achieved several important milestones during the period. Haizi has continued to increase its monthly production of inositol and we were very pleased to hit a record high of 130 tonnes in April 2014. Lansen has expanded its product pipeline with the addition of dermatology and skincare products. The management team has continued to work hard by streamlining and forming important synergies across different subsidiaries. Although we expect the next six months to be challenging due to pricing pressures in the region, we are confident that Cathay is well positioned to achieve further performance growth and deliver value to shareholders.”

Cluff Natural Resources (LON:CLNR 3.88p / £6.01m)

The natural resources investing company released its six month results to 30 June 2014. The company highlighted that since the year end they have received three further Underground Coal Gasification (UGC) licenses inshore bringing the total to eight totalling 61,274 hectares. CLNR is now entering the planning phase of its business plan for its UGC assets and is also engaging with potential end customers, and considering the merits of joint venture arrangements on a licence by licence basis. During the period losses fell to £749k (£805k) and operating cash outflows fell to £758k (£797k). Cash balances at the year-end stood at £2.18m. The company updated on its investing policy and proposes to continue to evaluate other potential oil and gas/mining projects in line with its investing policy, as it aims to build a portfolio of resource assets and create value for shareholders. The Directors are currently assessing various opportunities which may prove suitable although, at this stage, only preliminary due diligence has been undertaken.

Crossrider (TBC/TBC)

Crossrider, a next generation digital advertising company specialising in monetising desktop and mobile media through the use of big data, recently announced that it intends to proceed with an AIM IPO to raise new equity capital for expansion purposes. Crossrider operates in the rapidly growing digital advertising market, specialising in improving return on investment for advertisers and better monetisation for publishers through the analysis of big data. Crossrider has both web and mobile platforms which generate big data and has developed a proprietary ad serving algorithm and engine that can extract value from this data to deliver relevant advertising to targeted users. On a pro-forma basis in 2012 it generated revenues of US$6.4m, growing to US$21.6m in 2013 and to US$29.3m in the first half of 2014, generating adjusted EBITDA of US$7.7m in that period. The Company expects to raise gross primary proceeds of approximately $75m through the Offer.

Griffin Mining (LON:GFM 37.75p / £67.6)

The operator of the Caijiaying Zinc Gold Mine released interim results for the 6 months to 30 June 2014. Revenues were down marginally to $33.2m ($33.7m) but operating profit was up 26 per cent to $9.2m. Throughput of 408,671 tonnes of ore in the six months to the 30th June 2014 at Griffin’s Caijiaying Mine was in line with that achieved of 412,799 tonnes in the six months to 30th June 2013, resulting in metal in concentrate production of: 19,147 tonnes of zinc (2013: 19,077 tonnes); 609 tonnes of lead (2013: 903 tonnes); 147,901 ounces of silver (2013: 151,921 ounces); and 5,999 ounces of gold (2013: 3,869 ounces). Administrative state issues in China outside the Company’s control continue to delay the grant of a new mining licence over the unmined Zone III deeps, Zone II and adjacent areas at Caijiaying. Despite this delay, work is continuing with the upgrade of the processing facilities and underground development to increase throughput capacity to 1.5m tonnes of ore per annum. Considerable progress has been made to date with the above ground work expected to be completed by the end of October. Whilst the mining and haulage of ore has continued unabated during the expansion, the processing of ore has been suspended since 12th August for a scheduled 2 month period. Once the expanded processing capacity has been commissioned, it is expected that the stockpiled ore will be processed and the annual budgeted production targets met by year end.

HaloSource, Inc. (HAL:LON 15p / £15.11m)

The global clean water technology company announced its unaudited interim results for the six months ended 30 June 2014. Overall revenue for H1 2014 increased to $7.3m, up 24 per cent from H1 2013. Gross margins increased from 37 per cent to 39 per cent representing approximately $0.7m. Operating expenses fell by more than 7 per cent to $8.4m. The Company ended the period with $8.3m in cash, compared with $13.0m in total cash as at 31 December 2013. Cash flows used in operations of $4.7m decreased by 34 per cent, or $2.3m, compared to H1 2013. Drinking Water momentum continued to build rapidly with a succession of successful launches in China, India and most recently, Latin America. Revenues in the Environmental Water business increased as they continued to expand relationships with key strategic players in North America. The SeaKlear Recreational Water business grew modestly despite a decline in the entire US recreational water specialty chemicals segment in the face of adverse weather conditions in the northeast of the US. Post balance sheet events include the strategic partnership alliance with Rain for Rent to provide customers with enhanced water filtration solutions announced; and a strategic supply agreement with Fluidra, S.A., to accelerate the delivery of HaloSource’s enhanced recreational water solutions into the European and Australian pool and spa markets.

Kalibrate Technologies (LON:KLBT 129p/£42.86m)

Kalibrate Technologies, a provider of proprietary software-based products and services to the global petroleum retail industry, announced its final results for the year ended 30 June 2014. Revenue increased by 19 per cent to $28.8m (2013: $24.2m) and underlying EBITDA increased by 15 per cent to $3.6m (2013: $3.1m). Though statutory profit before tax was $0.2m (2013: $1.4m). Net cash of $9.6m as at 30 June 2014 (30 June 2013: net debt $0.5m) Commenting on the results, Bob Stein, CEO of Kalibrate, said: “2014 has been a transformational year for Kalibrate. Our financial performance, with double-digit growth in both segments of our business, coupled with robust progress in delivering upon the strategy that we articulated when we joined the market, places us in a very good position to deliver future growth…The Group continues to benefit from strong recurring revenues and has entered the current financial year with a 12 month order book of $22m. The Board remains confident that the Group is on track to achieve its current targets for the coming year.”

Medaphor (LON:MED 57.5p/£11.57m)

Medaphor, the provider of advanced ultrasound education and training simulators, recently announced its admission to trading on AIM. Medaphor is a global provider of advanced ultrasound education and training simulators for medical professionals. Medaphor’s lead product is the ScanTrainer ultrasound simulator training platform. The ScanTrainer simulator assists students, doctors and sonographers to acquire ultrasound scanning skills, with minimal expert supervision and without the need for a patient to practise on. The placing has raised approximately £4.7m, principally to fund the expansion of the Company’s sales network globally and to fund the development of new applications for the ScanTrainer technology platform within complementary medical markets.

MediaZest (MDZ:LON 0.15p /£1.37m)*

MediaZest reported turnover for the year of £2,944,000 (2013: £1,850,000), cost of sales was £1,978,000 (2013: £941,000) and the Group made a loss for the year, after taxation, of £653,000 (2013: £551,000). The Group had cash in hand of £268,000 (2013: £1,000) and a bank overdraft of £ nil (2013: £92,000) at the year end. The Group has made good progress in the last 12 months, and this has enabled it to complete two placings to institutional and other investors to raise £1,223,000 (before expenses and including conversion of interest). These placings have allowed MediaZest to invest in the strategies highlighted to drive additional business in the future and develop new products for which the Board believes there are substantial markets, particularly the Retail Analytics product. Further time and resource has been taken up by the final project delivery for Coca-Cola between September 2013 and May 2014. This has not improved performance in the first quarter of the Financial Year ending 31 March 2015. However, the second quarter is showing substantial improvement with several important business wins announced on 8 August 2014 and more expected prior to the end of the half year as a direct result of the changes made during the last twelve months. The core strategy continues to be the transition of the Group’s revenue base towards more ongoing, contractual-type business, and away from dependency on large scale projects which are difficult to predict and suffer the vagaries of timing. As such, efforts are being focussed on larger scale roll-out opportunities which naturally take longer to consummate than short term campaigns. The Directors believe this strategy is starting to pay dividends in the current quarter with the future pipeline in FY 2015 and beyond looking much improved.

Petards Group (LON:PEG 13.5p / £4.68m)*

The developer of advanced security and surveillance systems reported its interim results for the six months to 30 June 2014. Revenues were up 101 per cent to £7.2m and net profit after tax swung from a £338k loss to a profit of £273k. Cash at 30 June 2014 stood at £1.5m (31 Dec 2013: £1.4m) with no bank debt. The company gave the following statement on its outlook; ‘The second half of 2014 has started well and the Group continues to trade profitably. The Group’s overall order book is in excess of £20 million of which over one third is expected to be delivered before the end of the current year. There continues to be opportunities for development and growth in all of our current product areas and we expect customers to be placing orders on a number of projects in the coming months which we believe we are well placed to secure. The Board is confident about the Group’s prospects for the second half and beyond as whilst there is still work to be done this year in closing out new business, the present order book already provides a strong base going forward into 2015.’

Scancell Holdings (SCLP:LON 33p / £74.23m)

The developer of novel immunotherapies for the treatment of cancer, announced results for the year ended 30 April 2014. The loss for the year was £2,222,954 (2013: loss: £1,901,944) and cash balance at 30 April 2014 was £5,566,234 (30 April 2013: £1,491,320). This increase in cash is attributable to the placing and open offer earlier in the financial year which raised £6.1m, net. Richard Goodfellow, Joint CEO of Scancell, said: “The cumulative results emerging from our ongoing Phase 1/2 SCIB1 clinical trial, including the destruction of lung metastases in two patients and the apparent prolongation of survival, continues to add to the evidence that SCIB1 has the potential to extend lives without the burden of serious side effects. The rationale for combining SCIB1 and PD-1 blockade, confirmed in recent animal studies, is also compelling. Our ongoing Moditope® research continues to be productive as we continue to prepare Modi-1, our lead vaccine from this platform, for clinical trials which are on schedule to start in 2016. Cancer immunotherapy is emerging as one of most exciting areas of pharmaceutical research and development. Scancell now has two innovative technology platforms in this emerging field, both of which are expected to be of substantial interest to the increasing number of pharmaceutical companies establishing R&D programmes in the area.”

Stadium Group (LON:SDM 89p/£27.66m)

Stadium Group, a leading electronic technologies group, announced unaudited interim results for the six months ended 30 June 2014. Revenues came in slightly lower at £19.8m (H1 2013: £21.4m), but reported improved profit before tax of £0.8m (H1 2013: £0.0m) giving strong cash conversion from underlying operations of 149 per cent. Cash of £3.8m, is offset by bank loans of £3.0m, resulting in net cash of £0.8m. An interim dividend has been proposed of 0.7 pence per share, an increase of 55 per cent (H1 2013: 0.45 pence). Commenting on the first half performance, Chairman Nick Brayshaw OBE said: “I am delighted to report that in the first half of 2014 Stadium has delivered results in line with our expectations, with order books and profits materially up…The outlook for the full year remains in line with our expectations, with the second half of the year predicted to be stronger than the first half. The strengthening order book and the progressive success of our integrated sales strategy continue to drive this improvement in performance. Overall, we remain confident for the prospects for the full year.”

Synety Group (LON:SNTY 195p/£16.42m)

SYNETY Group, a cloud-based software and communications business, announced that it has signed a partnership deal with Oracle and is integrating CloudCall with Oracle Sales Cloud CRM. Simon Cleaver, Executive Chairman of SYNETY, commented: “We are excited to announce this partnership with Oracle and are proud that one of the largest software companies in the world approached us to provide telephony services for their customer base. As soon as we have finished the integration with Sales Cloud, we will look to deepen the partnership by rolling out CloudCall and integrating with other Oracle products”. The Company also announced results for 6 months to 30 June 2014. Revenues increased to £608k (H1 2013 £194k) and the operating loss increased to £2.24m (H1 2013 loss £1.35m).

*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.