Welcome to our new product “Friday Takeaway”
This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to help raise awareness
Friday Takeaway from UK Small Caps
This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to help raise awareness
1st August 2025
Alphabetically arranged
Share prices and market capitalisations taken from Alpha Terminal from the current price on the day of publication.
Top three shareholders are taken from the websites of the companies that we are writing about, unless there is a more up to date TR-1 notification RNS announcement.
Patented technology in scalable businesses can make compelling investment opportunities
LST On Fire
PCIP Frictionless Payments
Light Science Technologies Holdings 3.65p £12.15m (LST.L)
Last Reported in Friday Takeway, 6 December 2024 at 2.40p
Financial Calendar:
Year End November, reported 18 March 2025, Interims to May, expected before end of August
Top Three Shareholders:
Simon Deacon 28.89% (CEO), Dowgate Capital/Onward Opportunities 10.42%, Dr Graham Cooley (NED Chairman) 8.71%
Key Investment Points:
Three Scalable and Large Market Opportunities, Beyond Break-even, Interims Update should be positive
An innovative technology Company with three divisions and large market opportunities in Passive Fire Protection, Controlled Environment Agriculture, and Contract Electronics Manufacturing. Interims to May 2025 are due to be reported by the end of August. The Finals for the YE November 2024 reported record revenue with a 29.5% increase to £12.04m and improving gross profit margin to 30.3% from 23.4%. The Company is on cusp of break even, with a loss before tax of just £30,000 compared to a £1.14m loss, so the interims could be the inflection point. There was cash of £1m and undrawn funds of £0.87m available compared to cash and undrawn funds at 30 November 2023 of £0.98m.
Progress is reported from the Fire division where the market potential is estimated to be £50bn driven by increasing regulation. Following independent testing, the Injectaclad fire-resistant graphite barrier system, is proven to have a 50-year lifespan versus an average of 15 years. A customer in construction services has placed follow on orders for the patented system which can be retroactively installed. The Fire division's increasing revenue growth provides better earnings visibility.
The Agricultural division manufactures technology products and control systems for glasshouses, polytunnels, vertical growing, hoophouses, and other indoor growing environmental equipment, a market set to be worth £55bn plus by 2032. A patent for its environmental sensor, sensorGROW, was granted in June. These sensors enable customers Jepco, Bridge Farm Horticulture and Dyson Farming Research to measure the key cardinals of plant life in both air and root zones, helping them grow more with less in indoor and broadacre environments. The international reach is being expanded with distributor agreementsand trials, which are opening up opportunities and revenue pipeline.
The Contract Electronics Manufacturing division progressed with 4.7% organic revenue growth to 30 November 2024. The division specialises in PCBs (printed circuit boards) which are used in audio, automotive, electronics, gas detection, lighting, pest control, and controlled environment agriculture. A significant order was placed by a customer with 14 entertainment venues in the US, four venues in the UK, and with eight new venues currently under construction in the US. Other key markets are defence and healthcare.
Since the raising of £5.2m at IPO at 10p in 2021, a further £1.5m was raised at 1p in April 2023 and was used for product development and funding the fire product. Any further funding would likely be used for accelerated commercialisation.
Hybridan Comments: The 52% improvement in the share price since our previous comment is starting to reward the progress.
PCI-PAL 45.50p £34.78m (PCIP.L)
Financial Calendar:
Year End June, Finals expected before end December, Interims to December reported 4th March 2025
Three Main Shareholders:
Canaccord Genuity 12.67%, Gresham House AM 10.94%, Octopus Investment 8.97%
Key Investment Points:
Strategic Partners, Secure Trading, Product Development
The cloud provider of secure payment solutions for business communications showed good progress in its recent trading update. For the FY June 2025, the Annual Recurring Income (ARR) is expected to increase by 25% to £19.3m because of expanding its partner eco-system and broadening existing relationships; maintaining 100% retention of all strategic partners. The Total Revenue is expected to be £22.2m (£17.96m) and EBITDA of £2.5m (£0.9m).
The Company’s services enable all businesses to take secure and frictionless payments from e-commerce platforms, due to PCI-PAL's knowledge of deep technology integrations for the majority of Contact Centre as a Service (CCaaS) platforms. Clients include IKEA, RSPCA, DHL, Coca Cola and there is a wide geographical spread including the US, Europe, Middle East and Asia.
A new strategic agreement is with a billion-dollar revenue communications company with a recently launched CCaaS, which will offer the Company’s well-established unified products and compliant payment capabilities. CCaaS systems allow organisations to manage all their contact centre interactions and secure payments consistently and efficiently from a single solution. This cost-effective solution allows a wide range of communication channels; including voice calls, emails, text messages, chats, as well as various social media messages from one place.
Net cash of £3.9m is down from £4.4m in FY 2024 and investment is being further stepped up in FY26 on further product innovation and product launches to complement the existing PCI-PAL product suite and generate incremental ARR. This includes the launch of a new AI-powered fraud risk scoring product available across the PCI-PAL platform, which is designed to help businesses combat rising card-not-present payment fraud, responsible for 70% of credit card fraud in 2022. The recently launched product uses AI-driven insights delivered in real-time to customer service agents and AI bots ahead of collecting customer payments.
The June 2025 revenue and PBT are in line with market expectations with revenues of £22.4m and adj. PBT of £0.8m for an EPS of 0.96p which would give an expectant prospective P/E of 50x with an EBITDA/EV of 12.5x. The increased investment will be funded from available cash to continue to support long term organic growth rates of ARR in the region of 18-20% through FY27 and beyond.
Hybridan Comments: Confidence in the future prospects of the business are underpinned with directors, including the CEO, buying shares at prices ranging from 45p to 49p since the Trading Update.
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In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.
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