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
16th May 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.
A timely reminder of four companies covered in past Friday Takeaways that are reporting results shortly
CLX: Finals confirmed for 20 May
HDD: Interims estimated end of May
IXI: Interims confirmed 20 May
XSG: Finals confirmed 20 May
Calnex Solutions 50p £43.9m (CLX.L)
Last Reported in Friday Takeway, 11 April 2025 at 43.5p
The provider of test and measurement solutions for the global telecommunications and cloud computing markets updated on Trading on the 8 April for the FY March 2025. It reported that after a dull start, the key performance metrics had steadily improved, achieving a 12% growth in revenues to around £18.3m and an improved gross margin from 74%. The EBITDA is forecast at £5.0m up from a loss for FY March 2024. The underlying growth drivers are strong from mobile networks, continued acceleration of cloud computing, and AI growth in technology innovations, as well as network time monitoring, datacentre efficiency and effectiveness. There are significant opportunities expected to drive growth in FY26 and the EBITDA growth is forecasted on Alpha Terminal at £6.45m and PBT of £1m. The balance sheet is robust, with estimated net cash of £10.9m. The Board is confident of increased demand for Calnex's recently launched products.
Hybridan Comment: The 2026 forward EBITDA/ EV forecast on Alpha Terminal is 5.3x and suggests reasonable upside.
Hardide 6.875p £5.4m (HDD.L)
Last Reported in Friday Takeway, 25 October 2024 at 5.125p
The provider of advanced surface coating technology gave a Trading Statement at the AGM on 18 May ahead of the Interims to 31 March 2025, which are usually towards the end of May. The revenues for the H1 of the FY to September 2025 are expected to be approximately 30% higher at £2.73m compared to the equivalent period. This will lead to a positive EBITDA and a cash inflow, against a loss of £0.5m and a cash outflow of £0.7m. The growth is being driven by the aerospace business, including initial revenues from December’s new contract to coat cargo door components for freight aircraft. There is also some recovery in oil and gas sector demand. The relatively new CEO, Matt Hamblin, appointed in June 2024, has a US coatings and sales development track record. He is focused on pursuing initiatives to accelerate revenue growth and utilise spare production capacity. There are production facilities in the US and UK providing clients with a patented coating process involving advanced tungsten carbide and metal matrix composite coatings. This produces exceptional wear and corrosion resistance with toughness and ductility (high tensile stress). Hardide should be on track to deliver on full year market expectations for an EBITDA of £0.7m on £5.7m turnover, according to Alpha Terminal.
Hybridan Comment: Assuming the FY forecast is met, our calculated EBITDA/EV from Alpha Terminal of 6.7x is attractive.
IXICO 9.25p £8.6m (IXI.L)
Last Reported in Friday Takeway, 2 May 2025 at 9p
The Trading Update on 6 May for the six months to March 2025 anticipates revenues will increase 26% to £3.2m as demand improves for its neuroscience imaging, using its AI-driven platform to help advance therapy research in neurological disorders. The LBITDA is expected to reduce 54% to £0.7m from a £1.3m loss in the prior period. After the £4m capital raise at 9.5p at the start of the financial year, there is no debt, and cash is £5m (H1 2024:£2.5m). The funds are to support building the Company’s infrastructure including appointing key roles in the US, and increasing its order book. The Company remains focussed on advancing medicine and human health by turning data into clinically meaningful information across all phases of Central Nervous System clinical research. In February 2025, a commercial contract was signed for global Alzheimer’s Disease imaging analysis with a US biotechnology company. An additional project was also secured for Huntington’s Disease with an existing partner. The combined value of the new contracts is more than £0.5m, which will be recognised in 2025. The next generation Trial Tracker AI-driven imaging platform was launched after significant investment over the past few years and is expected to help the development into adjacent markets.
Hybridan Comment: The products and services are at a key stage of expansion and management is confident of delivering an accelerated performance, both organically and through partnerships.
Xeros Technology Group 1.4p £7.3m (XSG.L)
Last Reported in Friday Takeway, 7 February 2025 at 0.78p
Xeros' technology licensing model will become highly scalable as incremental sales from generating royalties from licensing has few extra costs. The Group’s technologies which reduce the environmental impact of the manufacture and care for clothes is being driven by the awareness of the need for clean-tech solutions. The washing machine industry is ready for innovation and change as there is pressure on leading OEMs to innovate to secure future sales and market share. The Trading Update on 5 February for the FY to December 2024 reported that following the £4.6m funding in April 2024 at 1.5p, the Y/E net cash was £2.8m, which the management is confident will be sufficient to reach month-on-month cash flow break-even. The Company is currently in discussions regarding eight licensing and partner agreements which in time could generate meaningful revenue.
Hybridan Comment: The price has nearly doubled since the last report, but licensing revenues from manufacturers are slow to build and hard to predict. Once passed the break-even point in c. 2026, the attractive operational leverage should become evident.
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