Friday Takeaway—delving a little deeper into UK small caps
This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to raise awareness
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.
Positive operational progress running ahead of financial performance
AREC A ‘full-bodied’ chance
TRAC Finding a way to grow
Arecor Therapeutics 66.00p £24.92m (AREC.L)
Reported in Friday Takeaway, 13 February 2026 at 74.00p
Financial Calendar:
Year End December, reported 13 April 2026, Interims to June, reported 25 September 2025
Top Three Shareholders:
BGF Investment Management 13.25%, Lombard Odier Asset Management 8.12%, Unilever 7.76%
Key Investment Points:
Big markets, Business progress, Partner negotiations
Arecor is a clinical-stage biotech Company that is developing innovative and ‘superior’ therapeutics focused on reducing the treatment burden and improving outcomes for people living with diabetes, obesity and other cardiometabolic diseases. The focus is on two core product areas of diabetes and the oral delivery of peptides, both of which are high growth multi-billion-dollar markets where the Company is developing a competitive edge.
The Finals for FY December 2025 were reported on 13 April this week. Total revenue, including discontinued operations, was £3.1m compared to £5.1m in the year to 31 December 2024. The decrease in revenues is due to the cessation of operations at Tetris Pharma, but it does reduce the burn rate. The PBT was £0.99m compared to a £5.10m loss in the prior period, with net cash of £6.1m against £3.2m at 31 December 2024.
An $11m royalty transaction deal was closed on 25 September 2025 to fund Phase 2 trial-enabling activities with an estimated cash runway from the Company into H1 2027. The operational highlights of the Finals for FY December 2025 reported advances in its core products and a pathway of ‘achievable’ milestones which are likely to attract increased commercial attention.
The obesity-diabetes drugs market is projected to grow from $59.9bn in 2025 to $103.3bn by 2035, at a CAGR of 5.6%. The $11m royalty deal was for $7m up front, and $4m in milestone payments, of which $0.5m has already been received and a further $0.5m payment of milestone payments is expected during 2026. The non-dilutive funds provide headroom to proceed with Phase 2 activities to prove the concept by evaluating a drug’s efficacy, optimal dosage, and short-term side-effects. Studies will continue with the initial low-cost pharmacokinetic/dynamic (PKD) for the oral delivery of the peptides platform. These activities create the prospect of a sequence of value adding news flow events.
The lead product AT278 is a category disrupting ultra-concentrated, ultra-rapid-acting (500U/mL) insulin, designed to transform Automated Insulin Delivery (AID) systems. AT278 has advanced across product development to initial commercial partnering.
A Co-development deal was signed on 25 September with Sequel Med Tech ('Sequel') to combine Arecor's ultra-concentrated, ultra-rapid-acting (500U/mL) insulin, AT278, with Sequel's twiist™ Automated Insulin Delivery (AID) system. Sequel, founded in 1970 is a US insulin pump device company. Arecor and Sequel will enter a broader, co-development and commercialisation partnership, and the Company has said that details are to follow. The Board’s focus is to secure the best possible deal to take AT278 into Phase 2 in 2H 2026, which involves recruiting 100-300 obesity patients.
The Company studies are generating insights and data to inform the next development steps for the oral peptide delivery platform, which has a low-cost burden, but is a large commercial upside opportunity.
A provisional patent covering these tri-functional linkers has been filed and synthesis of the first prototype completed. The Company expects to complete the three new classes of reagents in 2026, with commercial launch either directly or through licensing to follow rapidly.
Hybridan Comment: The indifferent reaction to the financials seems to ignore the operational progress reported and the significance of the potential news flow.
T42 IoT Tracking Solutions 4.75p £3.47m (TRAC.L)
Financial Calendar:
Year End December, reported 13 April 2026, Interims to June, reported 29 August 2025
Top Three Shareholders:
Avraham (Avi) Hartmann (Founder & CEO) 10.83%, Uri Hartman (CTO non Board member) 5.59%, Michael Rosenberg Non-Executive Chairman 4.66%
Key Investment Points:
New Business Model, Gaining Traction, Scalable Growth
Several years ago, T42 IoT Tracking Solutions changed fundamentally from vehicle tracking to shipping container monitoring solutions. The Company states that around 99.9% of shipping containers are not tracked or inspected for security, resulting in an estimated $50bn of cargo-theft costs per annum. Currently there are acute global supply chain challenges and delays with increasing logistics costs, which seems an ideal opportunity to expand.
The strategy is to leverage the proven technology to enter new markets focusing on establishing a direct presence in Europe, North America, and South America. A distribution partnership, across Australia and New Zealand, was announced on 13 April. This is to deliver comprehensive monitoring and asset intelligence solutions for government and public safety, defence and maritime operations, emergency services, infrastructure and utilities, and commercial and industrial asset management.
The Finals for the FY December 2025 were reported on 13 April, showed a 47% increase in Revenue to $6.1m, with a 250% growth in container-related sales compared to 2024. The software segment of the gross margin grew to 88%, compared to 82% in the prior period and the hardware segment recorded a gross margin of 25%, compared to a negative margin of 7% in the year to 31 December 2024. The operating expenses declined by $0.3m to $2.45m, with a substantial reduction in losses from a loss of $1.75m to a loss of $0.58m, which included an exchange rate loss of $0.59k. EBITDA is $1.26m compared to $0.34m in the prior year and the net cash of $424k at 31 December 2025 is down from $602k in 2024.
The core container product is a multi-sensor IoT tracking device with a wide range of detection capabilities which is supported by a command centre platform and there are 1m devices deployed. These are sold via a 100+ distributors network which is monitored, but the Company is not generally in touch with the end users so has limited influence over the sales process. A key strategic objective is to enter the B2C market which requires bespoke software and a tailored marketing and pricing strategy which is set to launch during the Summer 2026.
The strong performance of 250% growth in container-related sales is across four-contracts, which are ahead of management's initial expectations. This included one new multi-year agreement that exceeded the sales volumes for the whole of 2024. The encouraging momentum is also being helped by technical improvements as new versions increase reliability, scalability, power consumption and interoperability across the product range. The range includes: Lokies, which is a smart keyless lock, the upgraded Tetis tracking device, and Kylos modelling platform which enhances the support of significantly larger fleets and device volumes. The new Helios platform is designed to support the strategic efforts to expand into the B2C market, providing a simplified user experience, improved onboarding, and enhanced device management capabilities tailored for individual users and small businesses.
Hybridan Comment: With rising attention around maritime and supply chain risk in the current climate, T42 is well positioned to provide visibility and control to customers over their cargo. Our calculation for EV/EBITDA of c. 3.4x seems to undervalue the potential growth that could be accelerated with the launch into the B2C market.
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