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
15th 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.
Two companies at different ends of the business risk spectrum, but both set for growth
OBD Deal or No deal
REAT Earnings Flow
Oxford Biodynamics 0.425p £8.34m (OBD.L)
Financial Calendar:
Year End September, reported 28 February 2025, Interims March, Reported 30 June 2025
Three Main Shareholders:
Vulpes Investment Management Pte Ltd 12.9%, Unicorn AM 7.41%%, Sankofa Strategic Fund Ltd 6.57%
Key Investment Points:
Stable Platform, Nearer to a Deal, Cashed up to Avoid Dilution
The Company pioneering the use of 3D genomic biomarkers for clinical diagnostics announced a collaboration with Google Cloud this week to support the development and deployment of OBD's analytical framework on the cloud.
The Interims to March were reported in June with a new executive chairman, Iain Ross, in place. Ian has over 40 years' experience in the international life sciences and technology sectors and has held significant roles in multi-national companies including Sandoz, Hoffman La Roche, and Celltech Group plc. He stated that the bedrock for commercial success and the source of vital non-dilutive funding will be through "doing deals" and was confident it is not a case of "if" but "when".
The Interims reported an operating loss of £5.87m (31 March 2024: loss of £5.99m) on revenue of £0.59m (31 March 2024: £0.33m), mainly generated from testing fees, but also from increasing Prostate Screening test (PSE) sales. After a £7.35m funding at 0.5p in January, the net cash in March 2025 was £4.26m. There are two commercially available products: the EpiSwitch PSE (EpiSwitch Prostate Screening test) and EpiSwitch CiRT (Checkpoint Inhibitor Response Test) blood tests. PSE boosts the predictive accuracy of a Prostate-Specific Antigen (PSA) test from 55% to 94% when testing the presence or absence of prostate cancer. CiRT is a highly accurate (85%) predictive response test to immuno-oncology checkpoint inhibitor treatments. The Prostate testing market is valued at $7.9bn in 2025 and set to grow at 12% CAGR to reach $24.6bn by 2035.
There are several commercial discussions with third parties carrying out in-house evaluations and the Company is optimistic that product, technology, and data access deals can be signed. There is no guarantee this will be within the current cash runway, so steps have been taken to 'right-size' and reduce the cash burn.
The Google deal is an important milestone in the digital transformation and utilisation of OBD's knowledge base. The OBD platform is, due to the Google deal, more accessible to pharma and biotech companies and will enable OBD to scale its proprietary EpiSwitch knowledge space and analytical tools and deliver high-throughput, AI-powered 3D genomic analytics in a secure, efficient, and globally accessible environment. This should create future opportunities to commercialise the EpiSwitch platform.
Hybridan Comment: The Google contract increases the reach and extends the shortening cash runaway for a commercial deal to be concluded.
REACT Group 50p £12.05m (REAT.L)
Financial Calendar:
Year End September, reported 29 January 2025, Interims March, Reported 27 May 2025
Three Main Shareholders:
Octopus Investments Nominees Ltd 19.36%, Dowgate Wealth 11.95%, Harwood Capital LLP 11.0%
Key Investment Points:
Acquisitive & Organic growth, Momentum Building, Strategy on track
The delayed contracts from the first half were reported on 7th August as a high volume of small and medium-sized contracts. This will be a relief for shareholders in this acquisitive provider of support services to the Facilities Management (FM) industry. This progress in the successful execution of the stated strategy to generate new business, a high level of contract retention, and effective cross-selling of services, has hardly moved the share price.
The Interims to March 2025 reported a 12.4% increase in revenue to £21.1m, but this is mainly due to a five-month contribution from the potentially business transforming acquisition of 24hr Aquaflow. The consideration for this commercial drainage and plumbing services business was for up to £7.4m and supported by a £1.1m placing at 81p. Payment terms are £4m in cash, with 617,285 shares, and there is a performance criterion for the remainder. The Interim EBITDA to March 2025 increased to £1.43m from £1.28m and the acquisition contributed 58% or £827k.
REACT operates with four divisions: 1) LaddersFree, a commercial window cleaning business which reported securing national retail accounts with well-known brands including The Works, BP Forecourts, and H&M. 2) Fidelis is a contract cleaning and soft facilities maintenance business and reported several new multi-year contracts with industrial and manufacturing clients including Danatrol, Flexi Coventry, and Haldex. 3) REACT Specialist Cleaning business, which primarily provides emergency and specialist cleaning situations reported new customers including the NHS and construction firms. 4) 24hr Aquaflow performed well with contract wins including a multi-site residential agreement with Smart Managed Solutions and CCTV inspections agreement with Homes England.
The Interim cash and cash equivalents were £2.8m against £1.5m, although there is now net debt of £1.9m which includes £3.2m from a new term loan. Repeat or recurring revenue now accounts for more than 85% of total revenue. Operating cashflow remains strongly positive, while free cash flow was still being generated at the interims even after exceptional items mainly relating to the acquisition. The September 2025 year earnings forecast is for an EBITDA of £2.74m compared to £2.1m, on an 18% increase in revenue to £24.5m. The PBT is anticipated at £2m and an EPS of 6.48p, giving a prospective P/E of 7.7x and an EBITDA/EV of 5x.
Hybridan Comment: The returning business momentum and transformative acquisition should flow to earnings growth and justify a higher rating
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