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
27th June 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.
The prospects of these profitable companies can be further transformed by State and Government project expenditure
ILIKA Power Pause
PEB Staging a Recovery
ILIKA 40.00p £72.32m (IKA.L)
Last Reported in Friday Takeway, 10 January at 21.5p
Financial Calendar:
Year End April, To be reported 17 July 2025, Interims to October to be reported before end January
Top Three Shareholders:
GPIM 12.36%, Charles Schwab (New York) 9.32%, Hargreaves Lansdown 5.99%
Key Investment Points:
Product Development, Commercial Development, Net Cash
The developer of solid-state battery technology will be reporting Finals to April 2025 on 17 July. Ilika has developed ceramic-based lithium-ion technology which differentiates it from existing batteries by offering competitive energy density and charge times, while being inherently safe and easier to recycle. There was cash of £10m at the Interims and in May 2025 a further £4.3m was raised at 33p a share. Most of the proceeds are for the development and commercialisation of the massive Goliath EV battery opportunity.
The first batch of P1 prototype Goliath batteries were shipped to a Tier 1 customer in July 2024 for testing and showed positive benefits of Goliath across several key variables. Goliath energy storage cells have the potential to provide electric vehicles (EV) with lighter, safer, cheaper batteries with longer ranges and faster charging capabilities. There are trials and evaluations in progress with other automotive customers, OEMs, and Tier 1 suppliers as Goliath advances toward minimum viable product (MVP) status. MVP could be completed by the end of 2025 although timelines can stretch and is expected to confirm the cells meet customer-agreed specifications for EV applications. Ilika is actively pursuing commercial opportunities through strategic partnerships with OEMs and licensing opportunities.
The Stereax medical product range of small batteries has a ten-year licensing agreement with Cirtec for batteries used in medical devices and is expected to generate revenue by 2026. The finals to April 2025 are to be reported shortly and should show £1.4m of turnover, mainly from grants, and a loss before tax of £6.3m.
Hybridan Comment: The share price has increased 86% since our Friday Takeaway comment in January having passed product development milestones. The finals in July could be a reminder of the uphill journey to commercialisation, albeit the destination is a big target.
Pebble Beach Systems Group 9.00p £11.21m (PEB.L)
Financial Calendar:
Year End December, Finals Reported 23 April 2025, Interims to June, Trading update likely in July
Top Three Shareholders:
Kestrel Partners 24.7%, Hawk Investment Holdings Ltd 7.89%, Hargreaves Lansdown 7.72%
Key Investment Points:
New Platform, Recovery Underway, Debt reduced
Pebble is a developer and supplier of automation and content management software solutions for television broadcasters, cable, and satellite operators. Its Playout Solution takes multi-media video files or live feeds to transmit with frame precision for linear schedules and live event programming. Customers include Fox News, CNBC, IMG, TV Globo, as well as major streaming services, particularly those carrying live content. Founded in 2000, Pebble has commissioned systems in more than 70 countries, with proven installations ranging from one to over 150 channels in operation, and there are around 2,000 channels currently on air using the Group’s software.
The finals to December 2024 were reported in April and showed the year-end order intake had increased 24% to £13.6m, driven by a 56% increase in Service Level Agreements, which is recurring income. The less predictable Project orders, however, were flat in the finals to December 2024, with around £6.1m booked. The Pre-tax loss of £1.3m was less palatable compared to a FY December 2023 profit of £1.5m. The gross profit margins reassuringly remained steady at 77%, but the profit ‘fade-out’ was due to delays in contracts being finalised in H224. There was also a one-off impairment of £2.7m, and without this charge, the profit before tax would have been £1.4m. This underlying profitability is demonstrated by the strong cash generation allowing for a £1m reduction in FY debt to £3.7m, which is forecast to be less then £2m by December 2025. In March 2024, a £5.5m financing facility was agreed with Santander and runs to the end of October 2026.
A firm recovery seems underway as orders are closed and as a result of the actions taken in Q125, estimated annualised cost savings of £2.0m are expected to be delivered. In responding to a challenging market and unpredictable project orders, the full-scale adoption of the new software platform PRIMA was scaled back, but its ready to be commercialised. For the FY Dec 2025 the EBITDA is forecast to recover to £3.5m on £11.5m turnover for a PBT of £1.9m and as there is no tax, the EPS would be 1.5p. This gives a prospective P/E of 6x and we calculate the EBITDA/EV to be less than 4x.
Hybridan Comment: The valuation does not reflect the likely recovery or the debt reduction from cash generation.
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