Small Cap Wrap: Month: July 2016

AIM Breakfast - Archive

22nd July 2016

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.

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

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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.

7DIG Trading Update, ALSP* Loan Draw Down, AAU Placing, COG* Contract Win, CHAL New York Wheel, CBUY Contract Win, CGNR* New Gold Zones, DGS Trading Update, MSG* JV, NET Trading Update, OPTI* New Patent, SEE Trading Update, TPG Contract Win

7digital (LON:7DIG 8.00p/£9.46m)

7digital, the digital music and radio services company, issued a trading update for the half-year ended 30 June 2016. The Company has a healthy sales pipeline for the second half of 2016, demonstrated by the contract wins announced, and the Board remains confident of meeting expectations for the full year and continues to anticipate achieving profitability by the end of 2016. Total monthly recurring revenues for the first half rose by 4 percent against the comparative period last year. Improving sales momentum during the period saw the annualized exit MRR for the period rise by 10 percent and licensing revenues in June rose by 17 percent compared with 2015. However, due to termination payments from the legacy BlackBerry contract being included in the prior period and the planned reduction in low margin content revenues, overall turnover was broadly unchanged at approximately £5m. With over 50 percent of 2016 revenues expected to be denominated in foreign currencies (predominantly US$), the effect of recent currency fluctuations is expected to benefit the Company in the second half of the year. 7digital also announced that it has in the second quarter been awarded contracts with a combined value of approximately £1.1m, including set up fees and monthly recurring revenues, with growth coming both from new customer wins and from existing or prior customers to whom 7digital is providing additional services. The Company has reached an agreement with Cdiscount, a leading e-commerce retailer in France, to launch a new music service in the coming months. Cdiscount enjoys a 34.4 percent total share of e-commerce in France.

Ace Liberty and Stone (LON:ALSP 4p/£39.3m)*

Ace Liberty and Stone, the active property investment company capitalising on commercial property investment opportunities across the UK, announced that the Company has drawn down a secured loan of £3.4m against its Plymouth and Gateshead properties. This £3.4m loan, which has a five years’ repayment term, is provided by Nationwide Building Society, a new lender to the Group. The loan is secured by way of a first charge over Marsh Mills, Plymouth, and Shildon House, Gateshead, two purchases which were announced earlier this year. The loan will significantly improve the working capital flexibility for the Group. As a result of Ace’s open offer in February this year which was well supported by shareholders and raised £3.5m, and following recent purchases, the Company now has a £4m cash reserve which will enable it to continue to take advantage of attractive market opportunities.

Ariana Resources (LON:AAU 1.48p/£11.59m)

Ariana Resources, announced a placing of 29,616,666 new ordinary shares of 0.1 pence each in the Company at a price of 1.5 pence per share, in order to raise gross proceeds of approximately £0.45m before expenses. The Placing has been undertaken within the Company’s existing share authorities, and has been supported by both new and existing shareholders. The net proceeds of the Placing will be used to extend the current drilling programme and for developing new projects.  The Placing is conditional only on admission to AIM. In addition, the Company advises that three directors of the Company, namely Mr. Michael de Villiers, Dr. Kerim Sener and Mr. William Payne, intend to subscribe for a total of 2,050,000 shares on the same terms for a further sum of £30,750 following the announcement of the Placing.

Cambridge Cognition (LON:COG 33.80p/£6.84m)*

The neuroscience company Cambridge Cognition Holdings, which develops and markets near patient technologies for cognitive assessment, announced that it has secured its largest contract to date for the CANTAB Connect Research® product, which is marketed for use in research projects by academic and small biotechnology research groups. Worth an estimated £0.5m, the Contract is the Company’s first with an international biobank and the highest recorded sale of its research software. Biobanks amass large amounts of data and biological samples and catalogue them according to genetic, biological, environmental and other traits. These data and samples are then made available for researchers to support medical research in many fields. There are over 300 biobanks globally and the addition of neurological health data generated using Cambridge Cognition products will help to progress research into prevalent health issues, now and in the future. The Contract allows for unlimited assessments to be conducted using the Company’s proprietary touchscreen cognitive tests based on over 30 years of peer-reviewed science. The software will generate data that will be used for medical research to assess mental health in a general population over the next five years.

Challenger Acquisitions (LON:CHAL 21.35p/£3.65m)

Challenger Acquisitions, a leader in the Giant Observation Wheel industry, announced that it has received $1m from New York Wheel Investor LLC (NYWI). These funds, raised by Challenger in January 2016, were held in escrow by NYWI until final funding arrangements for completion of the New York Wheel Project were in place.  Challenger has been informed by NYWI that it has now received sufficient funding commitments from its sponsoring investors and therefore does not require these funds. Challenger now has a firm investment of $3m in the equity of NYWI, representing an interest of approximately 2 percent in the $590m NYW Project.  With funding formally secured to ensure completion of the NYW Project, the project continues to advance towards its opening.  Approximately $275m has been spent on the NYW Project to date, with major developments.

cloudBuy (LON:CBUY 4.75p/£6.41m)

cloudBuy, the provider of cloud-based e-commerce marketplaces and B2B buyer and supplier solutions, announced that it has signed a contract with University of Exeter for the supply of a new online procurement system. This will provide an intuitive way for the University’s staff to buy goods and services against contract agreements with a wide range of suppliers. cloudBuy is partnering with EU-Supply to provide a full solution including e-marketplace and e-tendering capabilities. The contract is for an 8 year period and will contribute revenue in the current financial year. Revenue is a mix of implementation and SaaS licence support and hosting. The project will deliver an accelerated phased implementation, providing benefits at each stage, leading to a Source to Pay solution fully integrated with the University’s finance system.

Conroy Gold and Natural Resources (LON:CGNR 34.00p/£3.66m)*

Conroy Gold and Natural Resources, the gold exploration and development Company focused on Ireland and Finland, announced that four new gold zones have been intersected in a drilling programme on its Glenish gold target in Ireland. The drilling results, together with previous channel sampling in the area which had proved 1.3 metres grading 9.4 g/t gold, demonstrated the presence of the four new gold zones in a 150 metre wide structural corridor in the western part of the Glenish gold target. The new drilling results included intersections of 2.25 metres grading 2.65 g/t gold, at a depth of 18 metres; 2.0 metres grading 1.59 g/t gold at a depth of 27.75 metres; 2.75 metres grading 1.43 g/t gold at a depth of 36 metres and 3 metres grading 1.76 g/t gold at a depth of 64.25 metres. The gold mineralisation in bedrock in the drilling area was traced down dip for over 70 metres and remains open in all directions. The Glenish gold target is a large, 147 hectare, gold-in-soil anomaly located 7.5km southwest of the Company’s Clay Lake-Clontibret gold target where the Company is targeting a potential of five million ounces of gold.

Digital Globe Services (LON:DGS 49.00p/£14.52m)

Digital Globe Services, a leading provider of digital marketing solutions for large, consumer-facing organisations, provided an update on trading for the year ended 30 June 2016. Trading in the second half of the year was robust and as a result, the Group expects to deliver revenue for the year of approximately $48.0m (FY15: $40.3m), marginally ahead of market expectations. The growth was driven by client wins in new verticals and increased volumes in the core business from the existing client base. Gross Margins experienced compression in the second half of the year due primarily to increased marketing spend. This was in part due to their entry into new industry verticals such as energy and utilities where they won new customers. EBITDA is expected to be below market expectations at approximately $3.1m, due to the lower gross margin on core business, new business, and direct labour costs associated with the acquisition of an on-shore call centre to support new verticals that require on-shore fulfilment centres. Management expects gross margin to recover to historic levels as new business matures. During the period under review, the Company has written down certain accrued revenues outstanding for over twelve months. This will represent a one-off non-cash expense of around $4m in aggregate. Management believes that a portion of this may be collectable but has written off the full amount.   The Company ended the year with a cash balance of approximately $0.6m with $1.5m drawn down under its $5m credit facility.

Milestone (LON:MSG 0.690p/£4.49m)*

Milestone Group, the provider of digital media and technology solutions announced that it has signed a JV with Axis Stars Limited to work with the Passion Project and utilise the suite of technology solutions available through the Nexstar JV. Former international footballer, Louis Saha has agreed to increase his company’s relationship with Milestone Group by signing a JV between his Axis Stars company and Milestone Group. The JV will be a 50/50 revenue share whereby Axis Stars will utilise its fast growing database of international sport stars to raise awareness of Milestone’s Passion Project initiatives while gaining access to Nexstar’s portfolio of finance, media streaming and publication technologies. Through the JV, Axis Stars will co-host events with Milestone, match its database of international sport stars to social causes to raise awareness of the Passion Project and help build brand value of both companies. Athletes, celebrities, musicians and actors are well known and trusted brands in their own right and the ignition point to the Passion Project as they bring relevant audiences in scale. Nexstar will also benefit from these agreements as it can offer innovative technology solutions including financial and publishing to its partners and their global audience.

Netcall (LON:NET 53.00p/£76.38m)

Netcall, a customer engagement software provider, announced that final results for the 12 months ended 30 June 2016 are expected to be in line with market expectations. The year has been characterised by double-digit growth in order inflow, with an increased share of the sales mix coming from SaaS-based contracts. The growing proportion of SaaS-based contracts increases the revenue visibility of the Group, by adding to the recurring revenue base in future periods. The Group has a robust cash position, maintaining its debt free balance sheet and being strongly cash generative at the operational level. At 30 June 2016 the net cash balance was £14.1m (31 Dec 2015: £15.2m), following payment of the first enhanced dividend and ordinary dividend, comprising £3.01m in total, in line with the Board’s dividend strategy.

OptiBiotix Health (LON:OPTI 75.00p/£58.64m)*

OptiBiotix Health, a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skin care, announced a new patent filing. The filing protects the combination of OptiBiotix’s Lactobacillus plantarum strain along with other ingredients identified by scientific key opinion leaders which act synergistically to reduce cardiovascular risk factors. The patent filing follows on from the announcement on the 7 April 2016 relating to human studies which demonstrated 0.1g of a capsulated product has commercial potential as a safe, easy to use, low cost cholesterol reducing supplement.  The filing of this patent extends OptiBiotix’s protection across a broader range of market opportunities and increases the number of partnering opportunities. Current products for cardiovascular disease tend to focus on single risk factors, largely LDL (bad) cholesterol. However, there is a growing evidence base that suggests cardiovascular risk is a sum of a number of factors including triglycerides and blood pressure. The novelty in the new patent filing is that when used in combination with OptiBiotix’s cholesterol reducing strain the combination has the potential to: reduce multiple cardiovascular risk factors in a single presentation, enhance the overall effect on LDL reduction based on synergies in mechanism of action and reduce statin dosage mitigating possible side effects and improving patient compliance.

Seeing Machines (LON:SEE 3.73p/£39.90m)

Seeing Machines, the company with a focus on operator monitoring and intervention sensing technologies and services, confirmed that it expects to report pre and post tax trading for the full year to 30 June 2016 in line with market expectations, with revenue for the year of AUD33.6m. This revenue figure is 77 percent higher than the previous financial year’s total revenue of AUD18.9m.  These revenue figures exclude the research and development tax incentive received from the Australian government which is reported in ‘Other income’.  This incentive, which is received as a cash refund based on eligible R&D expenditure, totalled AUD2.4m for FY16 (FY15 AUD2.2m). The revenue was earned from the sale of goods and services and license fees.  As previously reported, included in the license fees, was an amount of AUD21.8m from Caterpillar Inc. due on signing a global product development, licensing and distribution agreement. Caterpillar takes over all costs and commercial responsibilities for the manufacturing, marketing, sales, field support and remote monitoring of the DSS rugged off-road product suite. Caterpillar continues to commercially engage Seeing Machines in supporting the engineering of their next generation DSS technology. The Caterpillar agreement also provides Seeing Machines with a royalty stream for both hardware sales and all DSS supporting services. Royalties for the quarter ending 30 June were $0.15m lower than the previous quarter due to longer than expected sales cycles with certain customers. However, Caterpillar’s forecasting confirms that the number of technology trials and the overall volume of sales opportunities continues to increase.

TP Group (LON:TPG 5.05p/£22.44m)

TP Group, the specialist technology, engineering and managed solutions group, announced that it has been awarded a contract valued at c.£1.0m from an existing long term customer based in South East Asia for the supply of a submarine carbon dioxide removal system. The work will be undertaken by TPG’s wholly owned subsidiary TPG Maritime at the Group’s manufacturing and engineering base in Portsmouth over the next 18 months.  This contact potentially forms part of a broader replacement programme.

 

1st July 2016

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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 Distribution Agreement, AVCT Affimer Binders, AVG Return of Funds, PRSM Interim Results, COG* Distribution Agreement, FISH Placing, FITB* Board Changes, Placing and Loan Capitalisation, FUM Agreements, HCM Phase II, IGE Agreement, LRM Selected, NWF Trading Updated, PLI* Fast Track, SCH Trading Update, TMT* Invests

On this day:

1916 – The massive Allied offensive known as the Battle of the Somme began in France. The battle was the first to use tanks.
1979 – Sony introduced the Walkman.
1997 – The sovereignty over Hong Kong was transferred from Great Britain to China. Britain had controlled Hong Kong as a colony for 156 years.

Akers Bioscience (LON:AKR 100p/£20.11m)

Akers Biosciences, a developer of rapid health information technologies, signed its first distribution agreement for BreathScan OxiChek™ with Aero-Med, a division of Cardinal Health, a Fortune 500 health care services organisation. OxiChek is the first disposable breath test to rapidly determine levels of oxidative stress in the body by measuring the levels of certain abundant free radicals. Frequent use of OxiChek may help health practitioners to monitor and adjust their clients’ regimen of nutritional supplementation in order to manage oxidative stress – an indicator of the overall health and wellbeing of a person. OxiChek works with BreathScan Lync™, the new bluetooth-enabled reading device from Akers Wellness, to enable users to monitor oxidative stress via a mobile device.  Aero-Med is targeting the large specific markets in the United States of anti-aging, functional and integrative health and wellness treatment practitioners and has already placed orders for OxiChek.

Avacta Group (LON:AVCT 90.00p/£62.22m)

Avacta Group, the developer of Affimer® biotherapeutics and research reagents, announced it has identified three Affimer proteins capable of binding to a recombinant form of a secreted Zika virus Non-Structural protein 1, which is diagnostic of Zika virus infection at the early, acute stage. These Affimer binders were identified and characterised within just thirteen weeks of receiving the virus target and have the potential to be developed into new rapid point-of-care diagnostic tests for Zika infection. The three Affimer binders are highly specific to the Zika NS1 protein and can differentiate in human serum from five other closely related viruses that give similar symptoms: Dengue, Yellow Fever, West Nile, and Japanese and Tick-borne Encephalitis. Since these viruses are very similar, there is currently no validated antibody that detects Zika virus specifically, which is a limiting factor in the development of a reliable, quick diagnostic test. The ability to rapidly generate new diagnostic reagents in response to outbreaks of infectious agents is critical to meeting an urgent medical need, as recently evidenced by the SARS and Ebola virus outbreaks. The very high specificity of Avacta’s Affimer technology, together with the speed with which new Affimer binders can be identified and characterised, makes the technology ideal for rapidly responding to the need for detection and monitoring of new outbreaks. The Group intends to commercialise Affimer based rapid diagnostics through co-development and licensing to third party diagnostics developers an example of which is Mologic, a UK rapid diagnostics developer, with whom a research and product development collaboration was recently announced.

Avingtrans (LON:AVG 197.00/£55.12m)

Avingtrans, a manufacturer of critical components and associated services to the global energy and medical sectors, provided an update to shareholders on the proposals for the return of capital to shareholders following the disposal of the Aerospace Division. As the Company announced on 27 May 2016, following the disposal of the Aerospace Division, the Company had net cash in excess of £47m. The Board announced that it intends to return almost £28m to shareholders by way of a Tender Offer, representing 100p for each ordinary share in issue. The Board expects to announce its final results for the year ended 31 May 2016 during September 2016 and at the same time post a circular to shareholders setting out further terms of the Offer, and also seeking the necessary shareholder approvals. The balance of the net proceeds will be used to pursue the Group’s new strategy to invest in the Energy and Medical markets served by its Metalcraft and Maloney Metalcraft businesses, and more specifically to strengthen Metalcraft’s position in the nuclear sector and to pursue other related opportunities in the engineering sector.

Blue Prism Group (LON:PRSM 117.00p/£79.78m)

Blue Prism, a developer in Robotic Process Automation (RPA), announced its results for the six months to 30 April 2016, the first interim results as a listed Group following its IPO on 18 March 2016. Financial highlights showed total contracted revenue increased by 124 percent to £14.8m (H1 2015: £6.6m), group revenue growth of 21 percent to £4.0m (H1 2015: £3.3m) and recurring licence revenues now at 83 percent of total group revenues (H1 2015: 51 percent). Exit run rate (recognised, recurring license revenues) of £662k at 30 April 2016 (£252k at 30 April 2015), adjusted operating loss of £1.4m funded organically (H1 2015 adjusted operating profit: £72k) and Cash at the period end of £11.2m including £8.8m from IPO proceeds (H1 2015: £1.1m). Operational highlights showed strong new business wins in H1 2016 with 64 licence contracts signed in the period (40 licence contracts signed in the whole of FY 2015), underpinning future revenues. The group also won 33 new customers and total customer base is now at 90 (FY 2015: 57 customers). The channel partner ecosystem is gaining traction in line with strategy: 90 percent of new customers were acquired through or with channel partners

Cambridge Cognition (LON:COG 35.75p/£7.05m)*

Cambridge Cognition, which develops and markets products and technologies for near-patient cognitive assessment, entered into a distribution agreement with UK healthcare technology company MANUS Neurodynamica Limited. The agreement provides Cambridge Cognition with sole rights to market the MANUS Parkinson’s Pen, a sensor pen for diagnosis and monitoring of neuromotor impairments, in academic research, pharmaceutical clinical trials and occupational health markets. The CE Class I medical device uses non-invasive, patented technology to record and analyse limb and hand motion to assess underlying neuromotor processes, particularly for patients with Parkinson’s disease. An estimated seven to 10 million people worldwide are living with Parkinson’s disease, which is predicted to more than double by the year 2040. The combined direct and indirect cost of Parkinson’s is estimated to be nearly $25bn per year in the United States alone. Early diagnosis and timely access to specialist care for patients is essential. However, current diagnostic methods for Parkinson’s disease are based on a clinician’s subjective interpretation or neuroimaging techniques, which are expensive, invasive and require skilled operators. Following completion of final product enhancements, Cambridge Cognition expects to begin marketing the product initially for use in academic research through its existing global sales channels in Q4 2016. The product will subsequently be marketed for use by healthcare professionals to improve the certainty of differential diagnosis; in pre-symptomatic screening to identify and triage patients at risk and in monitoring disease severity in Parkinson’s patients by GPs and specialists in Europe and the US. Use of the MANUS Parkinson’s pen will provide a more accurate low-cost measure in clinical research and provide a direct cost reduction by assisting with a timely, accurate disease diagnosis to enable early treatment and avoid patient deterioration to the stage where intervention costs increase.

Fishing Republic (LON:FISH 38.60p/£14.73m)

Fishing Republic, the fishing tackle retailer, announced that it has raised £3.75m through a placing at a price of 35p per placing share (to new and existing shareholders. The net proceeds of the Placing will be used to support Fishing Republic’s continuing expansion as it seeks to build a significant market presence in the highly fragmented fishing tackle sector. In particular, the new funds will be used to develop Fishing Republic’s online platform and digital strategy, and to support further store openings, including potential acquisitions. The Placing, which was heavily oversubscribed, and the placing price of 35p represents an 8.7 percent discount to the Company’s 30 day volume weighted average price prior to 23 June 2016.

Fitbug Holdings(LON:FITB 0.250p/£2.96m)*

Fitbug Holdings, the technology developer and digital wellness pioneer, announced that Tyler Tarr, who has highly relevant experience of managing the finances of both growing and large cap technology companies, has joined the Board as part time Finance Director with immediate effect.  This appointment has been made in line with the Company’s strategy to become a provider of digital wellness services focussed on the B2B market.  Tyler has spent more than 10 years providing mergers and acquisitions advisory, debt placement, management consulting and interim CEO and CFO services to a wide variety of tech, media and electronics businesses. The company also announce a proposed equity fundraising to raise approximately £2.61m. The Fundraising comprises a placing of 340,800,000 Placing Shares at 0.25p per share with institutional and other investors and an open offer of up to 703,626,325 Open Offer Shares at 0.25p per share.  The Placing and Open Offer are being underwritten by NW1. In order to provide Shareholders who have not taken part in the Placing with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for the Open Offer Shares, to raise up to approximately £1.76m through the Open Offer, on the basis of 5 New Ordinary Shares for every 2 Existing Ordinary Shares held on the Record Date, at 0.25p each. At the same time, it is proposed that £8.4m of the Company’s existing indebtedness to Kifin Limited and NW1 Investments Limited will be capitalised into 336,000,000 New Ordinary Shares at 2.5p per share. These activities will substantially reduce the Company’s debt; provide it with additional working capital, stabilise its balance sheet and position the Company to further deliver on its turnaround strategy of enhancing and monitoring employee wellness using its innovative app-based technology.

Futura Medical (LON:FUM 21.35p/£21.40m)

Futura Medical, the healthcare company focused on advanced transdermal technology, announced that it has signed manufacturing and distribution agreements with TTK Protective Devices Limited, a pioneer in the condom business and part of the substantial Indian conglomerate TTK Group. Under the terms of the manufacturing agreement, TTK will manufacture CSD500, Futura’s novel erectogenic condom for supply worldwide.  A regulatory filing has already been made with EU regulatory authorities to grant TTK the relevant authorisation to manufacture the product. TTK will be one of two manufacturers of CSD500 as part of the Company’s strategy to guarantee international supply. A European manufacturer already holds regulatory authorisation to manufacture the version of CSD500 currently marketed in the Netherlands and is awaiting regulatory authorisation for the extended shelf-life version of the product. Futura has also signed an exclusive licensing agreement with TTK for the marketing and distribution of CSD500 in India for the lifetime of the patents. Futura will receive an upfront payment and royalties on product sales over the duration of the agreement. TTK already owns the fastest growing condom brand in India, SKORE, which since its launch three years ago has achieved in excess of a 10 percent market share. TTK is attracted by the unique characteristics of CSD500 to further drive the growth of the SKORE brand. Subject to regulatory approval, CSD500 is expected to be launched by TTK in Q1 2017.

Hutchison China MediTech (LON:HCM 1,874.00p/£1,117.55m)

Hutchison China MediTech Limited announced the initiation of a Phase II expansion of the ongoing TATTON trial to evaluate the selective c-Met inhibitor savolitinib (AZD6094) in epidermal growth factor receptor (EGFR) mutant non-small cell lung cancer (NSCLC) patients. Savolitinib has the potential to address major unmet medical needs in c-Met-driven subsets of NSCLC, a disease that is estimated to afflict approximately 1.7 million new patients annually worldwide. The trial is a single-arm global Phase II study of savolitinib in combination with Tagrisso (osimertinib/AZD9291) in advanced NSCLC patients who have developed resistance to approved EGFR tyrosine kinase inhibitors. This expansion was initiated following encouraging early data from a number of patients enrolled in the TATTON study who received savolitinib in combination with Tagrisso. The initiation of the expanded Phase II study has triggered a $10m milestone payment to Hutchison MediPharma Limited (HMP) (a 99.8 percent held subsidiary of Chi-Med) under the terms of the agreement with AstraZeneca PLC signed in December 2011. HMP and AstraZeneca are conducting Phase II studies in NSCLC with savolitinib in monotherapy, as well as in combination with either Tagrisso or Iressa. AstraZeneca continues to lead and invest in the global NSCLC development program for savolitinib.

Image Scan (LON:IGE 2.50p/£3.10m)

Image Scan, the specialist supplier of X-ray screening systems to the security and industrial inspection markets, announced that it has signed a distribution agreement for X-ray mail scanning systems with Todd Research, a leading manufacturer in the market. Furthermore, two orders totalling six systems have now been received. Under the agreement Image Scan will make use of its well developed and extensive global reach into the security market to find new customers for the Todd Research range of mail and security scanning systems. These systems are widely used to perform X-ray inspection of incoming mail and packages in embassies and other government buildings, as well as company headquarters and industrial facilities. Typical threats that have been encountered through the mail include letter or parcel bombs and powder based attacks. Advance image enhancement tools provide high detection performance against such threats. Todd Research is a leading company in this market with an installed base of over 600 systems. In early wins for the new partnership, Image Scan can announce orders from Africa and Asia in the form of six units of the MailScan-M model, the mid-size cabinet scanner, to customers in these important markets.

Lombard Risk Management (LON:LRM 8.37p/£34.26m)

Lombard Risk Management, a provider of integrated collateral management, regulatory compliance and reporting solutions for the financial services industry, announced that it has been appointed by two major banking firms in North America to supply its award-winning collateral management, clearing, inventory management and optimisation solution, COLLINE®. COLLINE® enables firms to move away from managing collateral in business line silos by supporting multiple asset types on a single, web-based platform. A single platform results in more efficient collateral management, enables collateral optimisation, and provides users with the capability to manage liquidity and trading book capital. Lombard Risk’s COLLINE was chosen for its ability to quickly deliver agile and adaptable solutions for these highly complex organisations. As is the case across the world’s largest banks, these new clients’ decisions to move away from costly legacy applications in order to consolidate their systems and margining processes was a major driver in selecting Lombard Risk. By leveraging COLLINE®’s straight-through-processing (STP) and exception-based processing they can also reduce operational risk. The COLLINE® cloud computing service also enables faster deployment and a substantially lower cost of setup and ongoing maintenance, affording clients the ability to realise business benefits sooner.

NWF Group (LON:NWF 147.38p/£70.36m)

NWF Group, the specialist agricultural and distribution business, announced a trading update for its financial year ended 31 May 2016 and its notice of results. The Group reported that trading for the financial year ended 31 May 2016 was in line with the Board’s expectations. In the Feeds division, profitability improved over the prior year in spite of continued challenging conditions in the dairy market, with further reductions in milk prices and volatility in key commodities. Feeds’ share of the UK market has increased on an underlying basis and the acquisitions during the year of New Breed and Jim Peet Agriculture have been integrated and are performing in line with our expectations. In Food, the business remained at capacity throughout the year and delivered further improvements in operating efficiency and profitability. Some additional storage space has been created at the Wardle site and service levels remain high. The Fuels division increased volumes, even though demand for heating oil was reduced due to the warm winter weather impacting profitability. Staffordshire Fuels, which was acquired during the year, has been fully integrated and is performing in line with our expectations. The Group’s cash generation has remained strong during the year. Net debt is significantly lower than anticipated, in spite of completing three acquisitions and investing development capital during the year.

ProMetic Life Sciences (TSX:PLI CAD2.81/CAD1,726.41m)*

ProMetic Life Sciences, reported that the U.S. Food and Drug Administration (FDA) has granted a Fast Track designation to ProMetic for its plasminogen drug candidate, currently in a phase 2/3 clinical trial in patients suffering from congenital Plasminogen deficiency. Fast Track designation is a process designed to facilitate the development and expedite the review of drugs to treat serious conditions that fill an unmet medical need, with the main objective of getting important new drugs to the patient earlier. To gain Fast Track designation, Plasminogen therapy demonstrated a strong rationale for its use as a treatment for a serious, often morbid and potentially fatal, condition as well as for treating an unmet medical need which previously largely relied on repeated surgeries to remove recurring obstructive and debilitating lesions. A drug that receives a Fast Track designation is also eligible for a Rolling Review of the Biologic License Application (BLA) by the FDA, allowing the review to proceed more efficiently and facilitating earlier drug approval and access by patients. ProMetic’s Plasminogen was also granted Orphan Drug Designation by the FDA and the European Commission for the US and the European markets respectively. As an orphan drug designated product, ProMetic’s Plasminogen is also eligible for priority review of the BLA, which reduces the standard review period by 6 months and so also speeds the time to availability of this important medicine on the market.

SafeCharge International Group (LON:SCH 196.00p/£299.15m)

SafeCharge, the global provider of payments services, technologies and risk management solutions for online and mobile businesses, provided the following trading update for the first six months of 2016. The Group has enjoyed strong trading in the first half, as a result, adjusted EBITDA for the period will be comfortably ahead of $16m and the Directors are very confident of the outcome for the full year. The Directors confirm that the US dollar is the Group’s functional and most significant currency in terms of contribution to revenues and that nearly 80 percent of the Group’s cash is held in US dollars with sterling balances representing less than 5 percent.

TMT Investments(LON:TMT $1.95/$54.10m)*

TMT Investments, which invests in high-growth, internet-based companies across a variety of sectors, announced the completion of an additional investment in KitApps, Inc, as part of a $1m round led by Digital Future and TMT. Incorporated in Delaware and based in San Francisco, KitApps, Inc. offers a leading event app platform (Attendify), which delivers branded, social-first apps to thousands of meeting and event planners worldwide.  Attendify makes it easy for event planners to create an engaging mobile app and dramatically reduces implementation and lead times through an elegant self-service platform.  Every Attendify app includes private social networking features that boost attendee participation while simultaneously helping event planners capture data around in-person interactions to help optimise event performance. Attendify was founded by Michael Balyasny (CEO) and Artem Iaremchuk (COO) and is relied upon by such leading brands as Google, AstraZeneca, Chrysler, Tableau, and AOL to deliver differentiating mobile event experiences. Attendify will leverage this new round of funding to further accelerate growth and product development.

 

*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.