Small Cap Wrap: Month: September 2011

AIM Breakfast - Archive

20 September 2011

Image scan captures a new contract, Animalcare has positive instincts about the future and Stellar demonstrates its efforts.

Whilst there has been a great deal of uncertainty over the last few months in the financial markets, the FTSE 100 displayed some good improvements over the last week, moving from 5,215 at the beginning of last week to close at 5,365 at the end. The AIM All share displayed more volatilities over the week however, closing the week broadly where it started at 770 points. This week, the IMF announced that the global economy had entered a dangerous new phase, stating that it thought that it would shrink to 4 per cent growth in 2012 from 5 per cent in 2010 due to factors such as major financial turbulence in the eurozone. The week ahead sees the publishing of the minutes of the BoE’s Monetary Policy Committee, as well as the annual meeting of the World Bank and IMF.

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Advanced Computer Software Group (ASW 39.5p / £140.18m)
Leading provider of healthcare and business management software and services last week published a trading update for the half year ended 31 August 2011. The Group expects to report first half results in line with the Board’s expectations with revenues of no less than £50m (2010: £47.3m) and adjusted EBITDA of no less than £13m (2010: £12.2m). At the period end the Group had cash of £9m (2010: £13.6m) and net debt of £25m (2010: £33.9m). Advanced Health & Care has continued to expand the market for its core patient care management software by partnering with Vodafone to market its iNurse product for district nurses and carers as a mobile application to Vodafone’s NHS customers. Negotiations with other network providers are progressing well. AHC continues to work closely with healthcare providers to establish operating models for the new 111 urgent care service and is also pleased to report strong demand for its care management products from the residential and homecare market. Advanced Business Solutions has seen increased demand from the public sector for shared services, procurement, budgeting and forecasting solutions, resulting in new multi-million, multi-year contracts, as local authorities and other organisations invest in technology in order to reduce costs. Advanced 365 has continued to trade well with multi-year orders of over £18m signed in the first half year for managed services which are increasingly being delivered as private cloud or hybrid cloud models. Cross-selling continues to be a major focus with multi-year contracts valued at £7m signed with new customers during the period.

Airsprung Furniture Group (APG 20p / £4.78m)
Hopes to bounce back in H2… Recent trading has indeed proved to be tough, with operating profits for the first half year  likely to be a little short of last year, before the costs of further redundancies and restructuring are taken into account. The independents and larger multiple chains continue to suffer from a severe weakness in demand, which has affected all divisions of the Group.  However the Airsprung Beds business through major catalogue and internet retailers has stabilised and had a reasonably solid start. Airofreem, the foam conversion business, is performing ahead of budget. With regard to the second half year, the outlook is now more promising than indicated in earlier statements. Several operational projects are producing positive results and gross margins are under control. Airsprung has not yet reached a turning point in the economic cycle, but the second half year should produce profits that can be regarded as satisfactory in the current environment and they remain confident in the prospects for the Group as the economy recovers.

Animalcare Group (ANCR 167.5p / £34.18m)
Animalcare Group, a leading supplier of veterinary medicines, this week announced its preliminary results for the year ended 30 June 2011. The Company has been operating for nearly a year as a veterinary supplies business having divested itself of the agricultural supplies businesses in the first quarter of the financial year.  Revenue from continuing operations was up 5.4 per cent to £11.8m (2010: £11.2m) with underlying profit before tax from continuing operations up 21.0 per cent to £3.0m (2010: £2.48m). The Board recommended a final dividend of 3p per share bringing the total dividend for the year up to 4p per share.  The Company reported that during the past financial year and now in the current one there has been little or no growth in the veterinary medicines market in the UK. However with the launch of several new veterinary drugs in the first quarter amongst other developments, the Board believes that it will continue to grow business markedly faster than the market overall and increase its market share.

Avesco Group (AVS 120.5p / £30.15m)
International provider of services to the corporate presentation, entertainment and broadcast markets last week announced its results for the nine months and three months ended 30 June 2011. Revenue was up 10 per cent to £97.4m (nine months ended 30 June 2010: £88.9m) and trading profit almost doubled to £3.2m compared to the corresponding period in the prior year (nine months ended 30 June 2010: £1.7m). Whilst three months to 30 June 2011, revenue was up 4 per cent to £35.4m (three months ended 30 June 2010: £34.1m) and a trading profit of £2.9m (three months ended 30 June 2010: £2.8m. Ian Martin, Chief Executive, commented: “…Looking towards 2012, we expect to benefit significantly from the “even year effect”, notably with the inclusion of business generated from the European Football Championships and the London Olympics. In addition, we shall have a full 12 months’ contribution from a number of multi-year projects that we have begun during 2011.”  The net cash generated from operating activities in the third quarter remained strong at £3.6m (three months ended 30 June 2010: £3.6m). The adjusted diluted earnings per share for the nine months ended 30 June 2011 was 7.9p (nine months ended 30 June 2010: 5.9p). The Avesco Group continues to progress and full year results should be in line with expectations.

Avingtrans (AVG57p / £14.52m)
Avingtrans, which designs, manufactures and supplies critical components and associated services to the medical, energy, industrial and global aerospace sectors last week announced its results for the year ended 31 May 2011. Turnover increased by 27 per cent to £36.3m (2010: £28.6m) and adjusted PBT increased to £1.4m (2010: £0.5m) with net debt reduced by 15 per cent to £ 36.6m and a final dividend of 0.4p per share re-introduced. Its strategy as a precision engineering group, operating in differentiated, specialist niches in the supply chains of leading OEMs, remains largely unchanged but it has benefitted from improvements in the majority of its markets. Looking forward the patchy performance of the UK economy is not expected to have a material impact on the group prospects but of greater concern is the turmoil in the Eurozone and USA where broader scale economic effects may be detrimental to manufacturing in the mid-term.

Eckoh (ECK 7.62p / £15.23m)
Eckoh, a UK provider of customer service solutions using speech recognition, has recently extended its relationship with the Ministry of Justice to provide card services to the Legal Services Commission. Having provided automated payments services to the department since 2004 for the quick payment of fines over a telephone (and in accordance with the industry standard ‘Payment Card Industry Data Security Standards’). The extension sees the provision of an automated service using Eckoh’s EckohPAY, which should see a reduced cost and a faster processing time for the Legal Services Commission for each transaction. Last month, the Company announced that a leading UK logistics organisation (they list ParcelForce as one of their customers) has signed a combined contract renewal for the provision of automated tracking and redelivery services. The Company is continuing to deliver to their clients, and the strength of their services and products is reflected in the strong performance in contract renewals/extensions.

Galantas Gold Corporation (GAL 5.88p / £13.84m)
Finds a pot of gold…the gold mine producer and explorer in Northern Ireland, reported that its 100 per cent operating subsidiary, Omagh Minerals Ltd (OML) has identified significant gold intersections in drilling on its Omagh, County Tyrone property. The drilling was carried out on the Joshua vein, on land owned by OML. Three of the holes were on the southern part of the vein with one hole (no.54) to the north. Further drilling, with some channel sampling, has been carried out on the Joshua vein and results will be reported when received. The samples were taken by geological staff under the supervision of R.Phelps C.Eng MIMM, (President & CEO, Galantas Gold Corporation), the Qualified Person for the program. Samples were analysed (gold by fire assay and other metals by ICP-ORE) at OMAC Laboratory Ltd of Galway, Ireland.

GGG Resources (GGG 22.88p / £37.91m)
GGG Resources announced this week a progress update on its merger with Auzex Resources Limited. An operational company called BBG Management Ltd has been established, the directors of which are made up of individuals from both GGG and Auzex, and a shareholder agreement and management agreement have been put into place. Existing contracts related to the Bullabulling project will be assigned to BBG Management, with future contracts being negotiated and entered into directly. Good progress has been made in establishing a Chairman for the organisation, with an independent executive search firm being appointed, and on an operational front the Company has appointed John Barton, a consultant mining engineer, to lead the completion of the feasibility study.
Last week, the Company announced its interim results for the 6 months to 30 June 2011- a period which saw the Company raise $8.1m of capital from institutional and retail shareholders after having listed on the Australian Stock Exchange in May 2011. This recent update on the merger demonstrates the continued efforts being made by the Company to grow this business.

Greenko (GKO 162p / £229.46m)
Greenko, a clean energy generator and supplier to the mainstream Indian market this week announced its preliminary results for the year ended 31 March 2011. Turnover increased by 130 per cent to €44.4m (2010: €19.3m) and profit before  tax was up 188 per cent to €14.0m as the Company laid the foundations for operational capacity to increase significantly, reinforcing the Company’s position as one of India’s leading clean energy producers. Clean energy is an increasingly important part of the Indian energy market and is attracting strong regulatory support and a favourable tariff structure . The Board reported that its hydro assets which have formed the bedrock of the Company’s portfolio are performing well and it has during the year taken started rolling out a comprehensive wind strategy which, together with hydro, will be the driver of the Company’s long term capacity growth.

Gulfsands Petroleum (GPX 178.5p / £217.75m)
Gulfsands Petroleum, the oil and gas production, exploration and development Company, announced interim results for the 6 months to 30th June 2011 in which revenues stated to have been increased by 53 per cent to $78.6m (2010: $51.4m), whilst pre-tax profit increased to $31.2m (2010: $16.7m). Also, the Company saw an increase in net cash from operating activities from $27.9m in 2010 to $56.6m in 2011, which is a significant achievement and a good reflection of the businesses performance during the period. Average group working interest production during the 6 months was 10,923 barrels of oil equivalent per day (boepd), compared to 9,689 boepd in 2010, and the Company continues to operate with significant interest in Syria, Tunisia and Iraq, though there is some uncertainty to the production outlook for the rest of the year as the Syrian government faces sanctions from the US and EU. Dealings, for example, with General Petroleum Corp have been disrupted, as has a planned production facility with Saipem, though the Company continues to remain committed to the region.

Hambledon Mining  (GPX 9.625p / £39.38m)
Goes for Gold…the Kazakhstan gold mining and development company has entered into an agreement for the purchase of 100 per cent of Akmola Gold; subject to certain government waivers and consents. The vendors are Central Asian Gold Corporation and Mr Yerkin Sadykov, who each have a beneficial interest of 50 per cent in Akmola Gold. The deal involves the acquisition of two wholly owned precious metals projects, Tellur and Stepok, both situated in central Kazakhstan, some 140 km North of Astana. The combined resources are around 440,000 ounces of gold plus silver and other metals; with considerable upside potential after further drilling has been undertaken. The total consideration is $5m, payable 50 per cent in cash and 50per cent in ordinary shares of Hambledon Mining. Gold production is expected to rise progressively over the next five years.

Image Scan Holdings (IGE 2p / £1.53m)
Image Scan, specialists in the field of real-time 3D and 2D x-ray imaging for the ‘Homeland Security’ and ‘Industrial Inspection’ markets, announced a contract win for the provision of x-ray security screening systems, valued at £1.46m. The contract takes overall intake in the current financial year to £4.3m, though a substantial portion of the contract will be deliverable in the next financial year, and margins are expected to be lower on this particular contract due to the competitive tendering process. This adds to the volume of contract wins over the last few months, having been awarded several new contracts totalling £405,000 back in June (selling 21 FlatScan portable x-ray screening systems, as well as making its first sale of mailroom cabinet systems). The Company is clearly continuing to focus on its pipeline of opportunities, and the recent announcement shows this is paying off.

One Media Publishing (OMPP.PL 3p / £1.30m)*
One Media, acquirers of music and video rights announced  they have signed an extension of ten years with its first music catalogue provider, Rainbow Media. Rainbow was paid an advance of $9,000 to secure the deal. Given historic and current trading values the deal is expected to generate $200,000 in digital revenue throughout the ten-year contract. All tracks will be made available through One Media’s digital retail outlets of 300 music downloading websites, including iTunes, HMV, Amazon, Spotify eMusic, Verizon, as well as other classical specialist stores.

ReNeuron (RENE 9.5p / £27.89m)
A stroke patient has been discharged from hospital after being treated with a higher dose of revolutionary stem cell therapy ReN001, it was revealed last week. The company said the remainder of this dose group, known as a cohort, will be treated by the end of the year as part of the pilot investigation of stem cells in stroke, known as the PISCES study for short. In all 12 patients will be treated with varying doses of ReN001 as part of this early stage trial being carried out in Scotland at the Institute of Neurological Sciences. The first dose cohort of three patients was treated without any side-effects or safety issues. Stroke is the third-largest cause of death and the single largest cause of adult disability in the developed world. The ReN001 therapy is based around ReNeuron’s lead neural stem cell line designated CTX by virtue of its origin from the cortex region of the brain. The firm’s other stem cell therapies include ReN009, targeted at peripheral arterial disease (PAD), and ReN003, its therapy programme focused on diseases of the retina.

ReThink Group (RTG 10p / £10.14m)
Rethink, a recruitment and consulting company, announced interim results for the 6 months to 30 June 2011. Impressively, the Company posted a 100 per cent increase in profits before tax to £423,000 (2010: £211,000) whilst gross profit was up by 32 per cent to £7.8m (2010: £5.9m). Further, the Company’s confidence in its future was demonstrated by an increase in interim dividend to 0.0986p per share (2010: 0.054p). The period has seen the business develop significantly from an operational perspective, with the acquisition of Berkeley Recruitment Group Limited in June 2011, providing increased sector and geographical coverage, three further international offices and additional expansion into high value pharmaceutical and life sciences markets. A 17.4 per cent growth in contractor numbers to 629, continued development of both the business transformation and technology services division and RPO division has served the Company well in its performance and sets a good benchmark for the Company going forwards.

Sceptre Leisure (SCEL 19.5p / £11.11m)
Last week Sceptre announced that it has secured a new contract to supply leisure machines to Marston’s PLC. The new contract will run for three years commencing in October 2011 and succeeds the previous three-year deal agreed in 2008. Sceptre has also been given the opportunity to increase the number of machines supplied to Marston’s PLC, and will continue to supply both the managed and tenanted/leased divisions. This contract follows other recent contracts wins including Punch Pub Company, SA Brains and The McManus Pub Company.

Stellar Diamonds (STEL 5.12p / £11.11m)
Stellar Diamonds is a London diamond mining and exploration company that focuses on West Africa. Last week it provided an update on the Company’s diamondiferous Droujba kimberlite pipe project in eastern Guinea. Thus far, 31 holes have been completed for 6,525 metres. Geological modelling undertaken by independent consultants, CAE Mining, indicates the potential for fifteen million tonnes to 350 metres of depth. Recent drilling has discovered that between the main drilling pipe, and southern pipe discovered by Stellar this year, the size of the intrusion increases with depth and that drilling is now planned for a depth of 400 metres and possibly deeper. Dewatering of pipe has also commenced in preparation for the bulk sampling, which is conducted in preparation for the construction of a bulk sampling plant. Furthermore, results from the drilling will enable the Company to make JORC compliant resource estimates in the first quarter of 2012.

Surgical Innovations (SUN 11.5p / £45.39m)
Primed for recovery… The Medical Equipment Company saw revenue and profits fall in the first half of the year following a lack of repeat orders from its industrial business. Revenues were £3.2m compared to £3.57m over the same period last year, while pre-tax profits were £474,000, down from £766,000. However, the group said it was “very confident” of meeting its growth targets over the next two years; investing £1.36m in manufacturing, research and development during the period. Mr Bowland (CEO) said revenues had been hit on a like-for-like basis because of a lack of repeat orders from the group’s industrial business, as well as a smaller reduction in OEM revenues, due to the phasing of orders. However the group has made considerable progress in the first half putting in place a number of initiatives and long-term plans to ensure the regular flow of new products to bring to market in anticipation of expected growth into 2012 and 2013.

Summit Corporation (SUMM 7.12p / £13.19m)*
Summit, the UK drug discovery company, announced that it is presenting positive data from its antibiotic program targeting infections caused by the ‘superbug’ Clostrictum difficile (CDI), a growing medical issue in hospitals and care-homes with an annual cost of $7bn in the US and Europe. Previous clinical trials have failed to address the problem posed by the virus, however, recent presentation at the ICAAC report results from various non-clinical efficacy studies, especially those taken in the human gut model of CDI and the gold standard in vivo disease model illustrate that Summit’s program addresses key clinical challenges. The results of the preclinical trials show that Summit’s preclinical development candidate SMT 19969, has a strong profile when compared to antibiotics that are currently on the market to treat CDI. The data shows that in the standard in vivo disease model SMT 19969 is superior in treating the hypervirluent strain of the disease and shows exceptionally low levels of resistance compared to current vaccines.

Synairgen (SNG 23.5p / £16.35m)
The respiratory drug discovery and development company with a particular focus on viral defence of the lungs last week announced its audited results for the year ended 30 June 2011. A phase II trial of inhaled interferon beta in asthma is on schedule: the last subjects are expected to be dosed this autumn, with results anticipated Q1 2012. Pre-clinical assessment of the utility of inhaled IFN-beta to treat hospitalised patients with severe viral lung infections is on schedule to produce preliminary results in the autumn 2011. R&D expenditure for the year was at £2.9m (2010: £2.1m), and the post-tax loss for the year was £3.2m (2010: £2.6m), with cash at 30 June 2011 of £4.9m (2010: £5.0m). In June 2011 Synairgen raised £2.5m net to enable three initiatives to be financed: firstly to accelerate recruitment of subjects for a Phase II asthma study; secondly to conduct a series of dosing-related in vitro experiments to support common business development related questions; and thirdly to extend the pre-clinical study to include H5N1, a highly pathogenic virus. Synairgen is entering an exciting period where we should see the results of proof-of-concept studies both from the clinical trial in asthma and in the broader field of viral defence, starting with influenza. A positive outcome from either, or both, of these studies will represent a significant step forward for the Company and pave the way for a successful development.

Telit Communications Plc (TCM 73.5p / £75.45m)
Telit, a global leader in machine-to-machine (m2m) communications, announced its interim results for the six months ended 30 June 2011. Revenue increased by 36 per cent to $81.1m (H1 2010: $59.6m) and Profit before Tax increased by 89 per cent to $2.8m. They also announced that integration of the Motorola m2m business (acquired in March 2011) is now substantially completed; strengthening their position in the global m2m market.  The gross margin decreased slightly due to the lower margin on the Motorola products, which they are taking steps to improve. 3G products development, with new Evolved High-Speed Packet Access (HSPA+) products family, continues to be successful.  Alongside all this they have launched their 4G LTE program, for the development of Telit’s future products complying with next-generation technologies. Since the reporting cut-off they have acquired GlobalConect, which is an additional building block in their strategy to provide customers with a full service portfolio, including connectivity and value added services.

Ubisense (UBI 200p / £43.31m)
Ubisense is a market leader of ‘location solutions,’ which delivers mission-critical enterprise asset tracking and geospatial systems. The Company’s main market focus is the automobile industry. Ubisense’s revenues have been increasing steadily, experiencing a 41 per cent increase in revenue in 2011 to £11.3m. Operational profit for this year is at £0.2m. The Company has a strong cash position with £8.1m, having been admitted to AIM in June 2011 when it raised £5m.

Ultrasis (ULT 0.72p / £10.91m)
Ultrasis, the provider of interactive health care services, this week announced that its Dutch partner, Innohealth BV, has developed a joint venture with Medic Info, itself a joint venture between two of Netherland’s largest health insurers, CZ and VGZ, which collectively provide insurance to 7.6m Dutch citizens. The new company, to be named ‘Psyhealth Direct’ will offer Ultrasis’ flagship product “Beating the Blues” to treat anxiety and depression across its membership.

ValiRx (VAL 0.6p / £6.32m)*
ValiRx, a life science company with a focus on cancer diagnostics and therapeutics for personalised medicine has announced that its wholly-owned subsidiary, ValiPharma Ltd, has signed a collaborative agreement with the Oxford based biology company, Physiomics. This collaborative project will be based on revenue –sharing agreement that will see Physiomics receive a percentage of the license that is received by ValiRx. In the agreement Physiomics will contribute its biology expertise and ‘Virtual Tumour’ technology to assist ValiRx to develop ValiRx’s lead therapeutic, VAL201, and speedup its preclinical programme to support the regulatory requirements prior to its entering clinical trials. The programme will create new IP which will add value to both parties. Furthermore ValiPharma will retain both ownership and commercialisation of VAL201, in addition to all VAL201 associated new IP resulting from the project.

Zenergy Power (ZEN5.76p / £ 3.98m)
Major re-structuring … Zenergy Power is to cut 70 per cent of its workforce following a restructuring of the company which will see the business  model focus entirely on the development and marketing of the Fault Current Limiter (FCL) product. The FCL design is not dependent on HTS magnets and thus capable of significantly reducing complexity and manufacturing costs. No further capital will be deployed on the development of Second Generation (2G) high temperature superconductor (HTS) wire or the magnetic billet heater (MBH).  The company hope that these changes will reduce the burn rate by two thirds from approximately £12m to £4m per annum.  The Group currently has cash balances of around £6m.

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The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

13 September 2011

Sound news from Silence, a good diagnosis for IDH, and Cello make the right sounds.

The volatilities continue… last week saw the ups and downs that have been plaguing the markets for a while now, with the FTSE 100 closing some 80 points down than at the start of the week, and the AIM All share closing some 5 points higher. Greek and Italian debt issues continue to be a sore point, which the markets continue to ponder widely on, and this week has continued the theme. UK CPI inflation for August rose to 4.5% from 4.4% in July, and there was an increase in Italy’s borrowing costs on five-year bonds to 5.6%, up from 4.93% due to a lack of investor confidence in finances, whilst the US markets saw the unveiling of a $450bn package of tax cuts and spending plans aimed at creating jobs and boosting the economy. The week ahead sees average weekly earnings and unemployment data being announced in the UK, together with retail sales data.

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Abcam (ABC 351.25p / £638.31m)

Abcam makes sources and cells protein research tools, which are used for studying proteins at a cellular level. The Company’s vision is to become the world’s leading supplier of protein research tools. The Company has just released its interim results. Abcam’s range of products continue to grow, as does the Company’s sales momentum.  Sales are up by 17.1 per cent and the Company’s product range has grown by 16.9 per cent in 2011. The Company has made two successful acquisitions, which have broadened the product portfolio. In May 2011, the Company acquired MitoSciences Inc for $6m, which is aimed to expanding Abcam’s presence in the antibodies field. Yesterday, the Company closed its acquisition of Ascent Scientific Ltd, a Bristol based research company for £10m, which will provide Abcam with access to a new market in small molecules and biochemicals. Though the Company faces challenges as a result of reduced public spending in some countries, growth in China and Japan have ensured growth and international expansion.

Alliance Pharma (APH 30.5p /£73.02m)

A week for interim results- the specialty pharma company announced figures for the 6 months to 30 June 2011, highlights of which include £1m growth in both revenue and profit before tax to £24.4m and £7m respectively, as well as a 47 per cent increase in the interim dividend to 0.25p per share. The period has seen some M&A activity too, with Anbesol™ and Ashton & Parsons™ being acquired in April 2011 for £2.6m, and just this week the announced acquisition of six products from Beacon Pharmaceuticals for £2.4m.
Operating across the areas of Dermatology, Oncology, Established Products and International, the Company sells a range of acquired and licensed products. Its strategy is to acquire/license established prescription products in niche areas where there is little or no competition. Deltacortril/enteric coated prednisolone (useful for the treatment of a wide range of inflammatory and auto-immune conditions) has been a key product for Alliance, generating significant sales volumes for the last two years, and whilst it has slowed down this year, the Company’s continued portfolio expansion is one that it believes will serve it well going forwards.

Anglesey Mining (AYM 48.5p / £76.71m)

Iron ore miner Anglesey announced that a second train at its 33 per cent owned associate Labrador Mines has begun operations to move iron ore from its James Mine and Silver Yards processing plant. With the new train in operation as of 3rd September, there is expected to be an increase in the tonnages railed, with 270 cars currently operating and a further 40 expected in the next two weeks. A third, but shorter train could also be in operation by the end of September, which would help ramp up the speed and volume of operation.
In total, since startup to the end of August, Anglesey has mined 478,000 tons of ore, with 100,000 tons at a grade of 65 per cent stockpiled at the port awaiting shipment- this is a significant volume, and an agreement is being finalized with the Iron Ore Company of Canada for ocean transport, with the first Cape-size vessel filled with direct railing ore expected to depart in the middle of September. A good update for the Company.

Advanced Medical Solutions (AMS 85p / £131.91m)

Medical technology company AMS announced its interim results for the six months ended 30 June 2011. LiquiBand(R) achieved 5 per cent volume share in the US in only its second year of sales; whilst sales of ActivHeal(R) into the NHS were up 64 per cent compared to the same period last year; the foam strategy delivered strong growth of 25 per cent on the first half of 2010; and the silver alginate growth continues to outstrip the wider market. The new facility is already delivering operational efficiencies and margin improvements. Group revenue was up 12 per cent to £16.3m (2010 H1: £14.5m) and basic earnings per share was up 21 per cent to 1.72p (2010 H1: 1.42p). An interim dividend of 0.145p per share is to be paid. AMS has also recently signed an Option and Licensing Agreement with Sinclair IS Pharma (SPH 25.88p / £98.54m) for anti-bio film technology and a Development and Pre-Supply Agreement with Surgical Innovations Group plc (SUN 13.5p / £53.29m) relating to internal adhesive fixation devices. Dr. Don Evans, Chairman of AMS, said: “Our broad range of products, partners and markets, together with continued innovation enables the Board to remain optimistic about the long term prospects of the Group.”

Ark Therapeutics Group (AKT 4.08p / £8.53m)

Ark Therapeutics Group announced that it has signed a manufacturing partnership agreement with PsiOxus Therapeutics Ltd under which Ark will provide full manufacturing and related services to support the development of PsiOxus’ ColoAd1 programme for the treatment of colorectal cancer. Martyn Williams, CEO of Ark commented: “PsiOxus will benefit from Ark’s experience in the regulatory CMC aspects of developing a gene-based medicine. We look forward to a long and successful partnership.”

Biome Technologies (BIOM 0.2p / £ 11.77m)

Biome announced solid Interim Results for the six months ended 30 June 2011. Group revenues were up 55 per cent to £10.4m (H1 2010: £6.7m) and Profit before tax was £0.1m; versus a loss of £1.7m for the same period last year.  The closing group cash position of £3.6m and new secured debt financing of £2m provides plenty of working capital. Both the Bioplastic and RF Technologies divisions were profitable for the first time with 49 per cent growth in Bioplastics Division sales and 92 per cent growth in sales for Stanelco RF. The company feels confident that they can continue delivering on their strategy and build the business successfully; their existing German facility is running at just 60 per cent capacity, thus they believe further sales growth will drop quickly through to the bottom line.

Boomerang Plus (BOOM 51.5p / £4.59m)

The media investment group announced the completion of a restructuring process which will create one of the UK’s largest television facilities services businesses. The restructuring will bring together two arms of the Company, the in-house post production and technical with Mwnci, the TV Post-Production arm that specialised in editing Film and Video for broadcast facilities. Boomerang will re-brand its newly created group Gorilla which will be based over three premises in Cardiff and will be the biggest TV facilities in Wales, and one of the biggest outside London.  The newly created group will provide studios, dubbing, grading, graphics, and outside broadcast facilities to programme markets and producers. The Group will also be increasing its range of editing services. The Gorilla team already has a strong reputation in post-production and has helped post-produce notable TV productions, such as Amazon and Arctic, Grandpa in my Pocket, and Time Team and Whites. The enlarged Group anticipates that the restructuring puts them in a better position to attract more customers as Producers look for a more comprehensive and efficient television facilities service.

Cello Group (CLL 30.75p / £24.07m)

Cello is a strategic marketing and consulting group with a focus on the pharmaceutical and healthcare sectors.  The Company’s gross profits are up 1.9 per cent to £30.5m. The Company has recently faced challenges from a decrease in public healthcare expenditure in the UK and expects to face further challenges because of reduced budgetary expenditure in the US and Europe. However, the Company has announced strong new business performance with a robust non-UK pipeline for H2. And they continue to maintain a significant presence in the US, Europe, and Asia. They have recently acquired MedErgy and Red Kite, which has put them on track for achieving their objectives; the Company forecast that their international business will grow from 31 per cent to 50 per cent by 2013 and are looking to open offices in India to complement their presence in Asia, the US and Europe. A further aspect of the Company that is proving fast growing is qualitative online research, including analysing social media networks.

Cluff Gold (CLF 112.5p / 148.33)

The AIM-listed West-African gold mining company has announced its interim results for the half-year ending June 2011. EBITDA profits saw strong growth in 2011 with $11.1m, a 158 per cent increase on H1  2010. The Kalsaka mine has produced 31,518oz of gold at $842/oz in H1; the Company has also started H2 with strong gold production and is in line to meet its target to produce 70,000oz of gold by the end of the year, despite the volatile political situation in the Côte d’Ivoire. The Company’s balance sheet is robust with cash holdings of $17.7m at 30 June 2011. However, exploration expenditure is set to increase to $10.2m as the Company accelerates its activity at the Baomahun and Kalska mines.

Emerging Metals (EML 1.98p / £7.11m)

Further to the announcement made on 24 August 2011, it announced a further $400,000 loan advance to Ferrum, its private 37.23 per cent associate company, to meet its immediate cash requirements to fund its on-going exploration.  Ferrum – through its 64 per cent subsidiary CMC – will conduct an initial exploration in Cameroon.  Ferrum will also commence its own additional geological and reconnaissance mapping in Sierra Leone and Guinea.  Ferrum has estimated these two latter work programmes, including in country operating and capital costs and consultants, will cost in aggregate approximately US$2.5m over the next six months.  It is necessary for Ferrum to commence these work programmes to maintain its rights to the licence areas in good standing which it believes are highly valuable.

Genus (GNS 995p / £596.39m)

Leading global animal genetics company announced its preliminary results for the year ended 30 June 2011. Adjusted operating profit including joint ventures up 7 per cent to £45.3m; North America and Latin America led the recovery with double digit profit increases; adjusted profit before tax was up 19 per cent to £39.0m and earnings per share was up 22 per cent to 44.8 pence. Improved cash generation and net debt reduced to £67.9m (2010: £80.0m) are all evidence of good cash management.  A recommended dividend increase of 10 per cent to 13.3 pence per share to be paid in November and the Board expects to declare an interim dividend for the first time commencing in 2012. Richard Wood, Chief Executive, commented: “In this my final year as Chief executive, I am pleased to report record results with adjusted pre-tax profits up 19%. In addition, good progress has been made in laying the foundations to realise the growth potential in developing markets particularly in Russia, India and China. This together with our global footprint and market leading genetics leave the Group exceptionally well placed to continue its growth in the years ahead.”

Goals Soccer Centres (GOAL 100p / £48.62m)

Goals, which is an operator of 5-a-side football centres, provided interim results for the 6 months to 30 June 2011, in which it announced an 11 per cent increase in revenue to £14.7m (2010: £13.2m), with PBIT up by 46 per cent to £4m (2010: £2.7m). Over the last 18 months the Company has increased the number of centres it operates by 30 per cent and currently operates at 43 locations, with a further pipeline in excess of 40 sites. The 6 months itself saw new sites in Sunderland, Liverpool South, Norwich and Hull.
Goals both constructs and operates sites, though one of the biggest challenges it faces in this is being able to roll-out new sites quickly enough due to the time associated with construction. In recognition of this, the Company has adopted a system of modular design, which it anticipates will bring down build time from 22 to 14 weeks and reduces capex to £1.5m per centre. Some sites however will require specialist build, where for example there are particular planning requirements that need to be met, but nonetheless the Company expects overall that costs will be saved and revenue can be generated more quickly. A good update by the Company.

Immunodiagnostic Systems (IDH 1,000.5p / £282.51m)

Immunodiagnostic Systems, a leading producer of diagnostic testing kits for the clinical and research markets, provided an AGM statement last week in which it was noted that revenues to 31 August 2011 grew by 22.8 per cent to £22.6m (2010: £18.4m), having sold 299 instruments during the period at an average of £88,000  per instrument. A further fifteen instruments are expected to be sold in September (taking us to the full first half). With a second half weighted profile of sales, IDH feels that the ‘trend ratio’ will be ever higher this year due to a relatively quiet July and August, and also higher anticipated reagent/instrument sales pull-through. IDH also announced the stepping down of David Evans as Chairman, with Anthony Martin taking up the position having had a strong track record in the diagnostics and life sciences space.
Back in June, IDH provided preliminary results for the year to 31 March 2011, in which it reported a 35 per cent increase in revenue to just over £50m, with profit before tax up 51 per cent. The recent trading update looks most promising, and we keep keen look out for further performance related updates.

Landkom International (LKI 3.38p / £14.68m)

The Ukrainian producer of agricultural commodities, announced last week the results of its rapeseed and what harvests. Although the wheat harvest was successful, the yield on the winter rapeseed crop proved disappointing and as a result of the lower than expected revenue generated from rapeseed. The Board now does not expect to report a pre-tax profit for the full year ended 31 October 2011 and has therefore begun a review of the business to consider a broad range of strategic alternatives and further updates are expected in due course.

Lifeline Scientific (LSIC 170p / £12.35m)

Leading medical technology company focused on developing proprietary technologies designed to improve the quality and availability of vital organs for transplant issued a trading update for the six months ended 30 June 2011. On the back of another strong year in 2010, the Company reported good progress throughout the first half of its financial year. Further positive clinical research findings have driven broader adoption and usage of the LifePort Kidney Transporter and continued growth in sales of associated single use consumables. At the period end there were some 120 transplant programs in 20 countries employing LifePort. LSI’s ongoing efforts in emerging transplant markets leaves the Company confident that sales of the LifePort Kidney Transporter will continue to grow in the near term. In particular, progress in Brazil is expected to provide additional momentum toward the end of this year into 2012 as the Company is nearing completion of regulatory approvals to enable full market access. In addition, product line innovations continue to drive market adoption and strengthen the Company’s presence in the global transplant community.

MDM Engineering Group (MDM 98p / £36.51m)

MDM announced that it has been awarded the Gold Fields Ghana Limited (E)PCM contract for the Tarkwa project in Ghana, which will include the provision of services for the CIL Crushing Plant Expansion Project. MDM completed a Conceptual Study for the CIL crushing optimisation in September 2010. The Conceptual Study examined the existing test work, plant operations and plant equipment in order to develop the flow sheets to best achieve the optimisation. In March 2011, detailed engineering and design was submitted and based on this, MDM will be moving forward with expanding the project.

MediaZest (0.62p / £1.55m)*

Creative digital out-of-home advertising and audio-visual integrator has announced its final results. Revenue for the year 2011 increased by 60 per cent on last year to £918,000. The Company has also managed to reduce losses after tax by 60 per cent to £457,000. This improvement in gross margins is attributed to moves by the Company to focus business towards higher margin installation, maintenance and consulting services rather than solely on equipment sales. Additionally, the Company had a fund-raise of £440,000 in March 2011 from both existing and new shareholders. The cash balance of MediaZest currently £365,000.

Namakwa Diamonds (NAD 13p / £28.23m)

The integrated diamond resource group encompassing mining, trading and manufacturing has reached an agreement with strategic partner Jarvirne securing the immediate funding requirements of the Company’s key kimberlite mining project at Kao in Lesotho. The US$40m, 2 year secured loan facility will enable their operating subsidiary Storm Mountain Diamonds to complete the Phase I development and move into commercial production at their flagship asset at the Kao Mine in Lesotho.  The Company also announced Edward Haslam’s appointment as Chairman with immediate effect, and Alex Davidson as Senior Independent Non-Executive Director of the Company. Two further nominee directors have been appointed to the Board, as non-executive directors:  Allen Gessen and Gerard Holden, both are currently advisers to Jarvirne.

NetDimensions (NETD 23.25p / £5.89m)

NetDimensions is a provider of performance, knowledge and learning management systems. The company’s products and services are aimed to deliver and manage corporate training, career development, assessment and certification programs, and help clients address regulatory compliance needs. Clients include government agencies, businesses, healthcare insurers and other industries. The Company has just announced its interim results ended June 2011. The Company has grown by about 30 per cent, 20 per cent attributed to organic growth as a result of growth in sales and the rest resulting from sound strategic acquisitions the company made in 2010, which has contributed positive synergies. NetDimensions has 63 new clients through direct sales or resellers (the Company allows its licenses to be resold), including major contract with Intekras, a professional services firm that advises the US federal, state and local governments. Much of this growth is attributable to their technological innovation, particularly in user interfaces and mobile platforms. In H1, despite strong growth in sales, the Company made a net loss of $0.7m in H1,  primarily due to business seasonality which the Company expects to turn around in the H2. The Company has a strong cash position, $5.9m, and no debt. NetDimensions is looking to expand in emerging markets, such as Brazil and China, and is looking to make strategic decisions on setting up operations in these markets. So far, the Company’s trading in 2011 is in line with management’s growth expectations.

Polo Resources (POL 5.41p / £126.58m)

Reported unaudited preliminary results for the 12 months ended 30 June 2011, which stated that net profit for the year of US$65.2m (30 June 2010: US$28.8m). Polo completed the disposal of its uranium interests, including Extract Resources, for US$142m and realised a net gain on disposal of US$62.7m adding to the US$20m deferred cash consideration for their 50 per cent interest in the Peabody-Polo Resources Mongolian coal joint venture. The Board utilised part of the proceeds of the disposal to fund a special dividend to shareholders of three pence per share for a total of US$113.9m. US$7.8m was devoted to the share buy-back programme and a total of 168.4m shares were cancelled from the Company’s share capital during the period. Subsequent to the financial year end, the interest in Caledon Resources plc is being realised as Guangdong Rising (Australia) Pty Ltd confirmed acquisition of Caledon in an all cash offer of 112 pence per share. Polo will receive total gross proceeds on the disposal of its remaining interest of approximately £90.15m. The Board of Polo intends to utilise part of the proceeds to fund a special dividend to shareholders of two pence per share, upon completion of the sale of Caledon and receipt of funds.

Rurelec (RUR 7.75p / £32.60m)

Rurelec, the electricity utility focused on the development of power generation capacity and rural electrification projects in Latin America, last week announced its unaudited interim results for the six months ended 30 June 2011. The Company increased its turnover to £7.2m (2010: £4.7m) and made a gross profit of 33.3m for the first half of the year (2010: £1.4m). Events at Energia del Sur, its asset in Argentina, are satisfactory and in line with expectations. Its other principal asset is the value of the nationalised interest in Guaracachi, Bolivia and progress is being made on the arbitration process for the payment of compensation for assets nationalised in Bolivia. The Company remains committed to paying a special dividend when Bolivia settles the expropriation claim or when EdS is refinanced.

Silence Therapeutics (SLN 1.6p / £9.23m)*

Silence Therapeutics, a leading global RNA interference therapeutics company has announced a deal with InteRNA Technologies, a biopharmaceutical company developing pathway targeted microRNA-based therapeutics for cancer. The deal will see both company’s working to develop novel microRNA therapeutics for the treatment of cancer. This will combine the delivery capabilities of Silence’s proprietary AtuPLEX delivery system and InteRNA’s microRNA’s to develop multiple drugs. Silence is currently conducting a phase 1 trial with Atu027 in patients with advanced solid cancer. Atu027 is based on AtuPLEX delivery technology. Interim data analysis from a trial conducted in 2011 for the American Society of Clinical Oncology has shown that Atu027 is safe and well tolerated in patients, providing broad support for AtuPLEXas an effective siRNA delivery technology with the potential of overcoming the delivery challenges associated with RNAi therapeutics.

Stadium Group (SDM 68.5p/£20.12m)

Stadium Group, provider of electronic equipment manufacturing services and power supplies, provided interim results for the 6 months to 30 June 2011. Results appeared to be somewhat flat, with revenues of £23.2m (2010: £23.12m), whilst profit before tax went up by 9 per cent to £1.58m. Net cash on the balance sheet stood at £3.7m (2010: £1.67m), and the Company paid an interim dividend, up 10.5 per cent to 1.05p per share.
The Company appointed a new Chief Executive, Stephen Phipson CBE, on 1st September to spearhead a growth strategy and capitalise on opportunities across the entire business. A cost cutting programme is one area being looked at, with a considerable saving expected from a possible centralisation of materials procurement. The period also saw the divestment of the surplus property at Chingford- all in the Company looks to be in a process of rationalising its business and looks ahead with great optimism.

Tandem Group (TND 98p / £9.56m)

Designers, developers and distributors of sports and leisure equipment, announces an H1 Trading Update:  Like for like H1 revenue was down to £16.7m (vs. £19.1m) Although gross margins improved following more favourable currency rates and shipping costs, management expects that the profit for the period before taxation will be lower than the last year but above H1 09.  Despite the difficulties, profitability from the bicycles and accessories business was greater than the comparative period last year demonstrating that the strategies implemented in last year’s strategic review are coming to fruition: Greater focus on flagship brands of Claud Butler and Dawes.  However, in the sports, leisure and toys businesses the exceptionally cautious buying plans from national retailers, has had an adverse impact on performance.  Nevertheless, this part of the Group still remains profitable. Looking ahead, there are currently no indicators that the position will improve, although listings for Spring/Summer 2012 have been maintained and are broadly similar to 2011.  The Company is expecting to be able to announce that an interim dividend will be paid.

Tristel (TSTL 43.5p / £17.39m)

The manufacturer of infection control, contamination control and hygiene products, announced that it has received the administrative licences to sell its medical instrument disinfectant “Fuse” and surface disinfectant “Jet” from the Chinese Health authorities. Tristel Fuse is a mixable sachet which contains a single, easy to use dose of Tristel’s proprietary chlorine dioxide chemistry. Fuse is first activated within the sachet and then simply added to five litres of water to create the correct concentration for cleaning and disinfection of medical instruments. Tristel Jet is a non-aerosol gel-based trigger spray which permits accurate directional application of Tristel’s chlorine dioxide chemistry to hard surfaces. Paul Swinney, Chief Executive of Tristel, said: “Our product approval programme in China is progressing well…Worldwide export sales are forecast to be a major contributor to our top-line growth this year.”

UKrProduct (UKR 18.5p / £7.55m)

UKrproduct, one of the leading producers and distributors of branded dairy products and third party products in the Ukraine, last week announced its interim results for the six months ended 30 June 2011. Total revenue was up 21 per cent to £25m (2010: £20.7m) with profit before tax up 19 per cent to £0.52m (2010:£0.44m). Within these figures, branded/own label products and distribution services for third party products performed strongly whilst skimmed milk powder saw significant declines in revenue and gross profit as a result of a weak domestic market.
The Company has started construction work to modernise one of its plants within the framework of a project financed by the European Bank for Reconstruction and Development. The upgrade will bring substantial energy and other cost savings from its completion, expected to be in mid-2012.
In the second half of 2011 the Company aims to further increase the sales of branded/own label products with trade marketing campaigns and further adaptation of the product portfolio to meet new market requirements whilst the skimmed milk powder market is expected to remain subdued. Margins are expected to remain under pressure through a combination of the new less favourable milk subsidy regime and increases in raw milk prices and other input costs. The Company will therefore be focused on cost cutting measures to sustain profitability.

Ultrasis (ULT 0.68p / £10.31m)

Ultrasis, the provider of interactive health care services, this week announced that its flagship product for the treatment of depression, Beating the Blues, is to be used as a key component in a five year research study within the US Army. The trial, entitled STEPS UP will test the effectiveness of a systems level approach to primary care recognition and management of post-traumatic stress disorder and depression with the overall aim of improving healthcare for service members with PTSD and/or depression.

ValiRx (VAL 0.62p / £6.53m)*

ValiRx, a life science company with a focus on cancer diagnostics, has signed an agreement with Medcase OY MCO, a Finnish distributor of personal health products operating across the Nordic region. The Agreement, includes a minimum upfront order for 300 kits being placed by Medcase, will see Medcase use its distribution channels in Finland and Sweden, which will enable ValiRx to accelerate the sales and marketing of the Company’s SELFCheck kits. The agreement signed is initially for the period ending 31 December 2011, during which time Medcase will implement and assess the market uptake of the SELFCheck range. Following this initial period, a longer-term commercial distribution agreement may be entered into between ValiRx and Medcase. The agreement also stipulates that Medcase will not deal in other products that will be in competition with the SELFCheck product range. All SELFCheck products provided by ValiRx under the terms of the Agreement will bear the CE marking required for sale into the European Community. Dr Satu Vainikka, CEO, commented: “the agreement with Medcase will hopefully take ValiRx closer to delivering on our goal of building a commercial self-funding biopharmaceutical company.”

Verona Pharma (VRP 8.25p / £19.79m)

The biotechnology company dedicated to discovering new drugs for the treatment of chronic respiratory diseases announced the results of the clinical trial of its novel cough drug, VRP700, conducted at the University of Florence, Italy. By all the measures used, VRP700 significantly reduced coughing in patients with chronic intractable cough due to underlying lung disease. This beneficial effect was not associated with any adverse effects. The study met all of its primary and secondary endpoints. Michael Walker, CEO of Verona Pharma, stated that: “The data from the trial will be used to further advance the clinical value of VRP700, including identifying and developing a second generation of compounds as well as further clinical studies to facilitate the introduction of VRP700 as a novel, first in class inhaled medicine for the treatment of cough.”

Waterlogic (WTL 175p / £135.81m)

Waterlogic, a leading manufacturer and global distributor of point-of–use (POU) drinking water purification and dispensing systems, this week announced its inaugural unaudited interim results for the six months ended 30 June 2011. The Company came to market in July 2011 with an IPO raising $65m.The Company reported that despite a challenging wider macroeconomic environment in the Company’s main markets in Western Europe and the US, Waterlogic enjoyed a solid performance in the first half of 2011, increasing revenue by 29 per cent. and maintaining good profitability. The Company reported group revenue of $39m (H1 2010: $30.2m) with net income (profits) increased to $1.5m (H1 2010: $0.3m).

Xenetic Biosciences (XEN 8p / £14.19m)

The bio-pharmaceutical company specialising in the development of high-value differentiated biologic drugs and vaccines announced that the Company now trades on AIM under the name Xenetic Biosciences plc and the ticker XEN as opposed to Lipoxen as it was formerly known. Xenetic also announced that it has received a notice of allowance of a patent application that covers the Company’s co-delivery technology in the US. The application will proceed to grant shortly and Xenetic Biosciences will provide an update once the patent has been granted. Xenetic Biosciences already has Patents granted in relation to this technology in Europe, Russia and China as well as separate Patents that cover their polysaccharide based vaccines.

A full archive of previous weeks’ Small Cap Wraps can now be viewed on

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

06 September 2011

Better view ahead for Clarity, good all round picture from DDD and US health insurers get the Fitbug

Welcome back to the Small Cap Wrap, which returns after the Summer break… hope it was a good one

August was a pretty turbulent month in the financial markets, and September continues with the theme. Having pushed up to 5,430 points mid-week last week, the FTSE 100 dropped back down to 5,120 points at the end of the week, with the AIM All share closing at 770 points. European debt burdens have continued to rock the markets this week, with a fear that nations such as Spain and Italy may be forced to follow Greece in asking the markets for lower rates of interest on its government bonds. The problems are causing widespread debate amongst commentators leading to questions over whether there should be a change in the nature of the Eurozone, causing further disruption. The week ahead sees BoE and ECB interest rate announcements together with industrial and manufacturing output figures for the UK.

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African Medical Investments (AMEI 5.62p / £14.65m)
African Medical Investments, the AIM listed operator in the African healthcare sector, last week announced its preliminary results for the year ended 28 February 2011 and the appointment of Peter Botha as CEO. The first half of the year proved challenging with the departure of the company’s previous CEO following the discovery of financial irregularities, but the Board believes the Company is now well positioned to make progress. The Company is operating in a rapidly growing market where the demand for quality private health care from a combination of the emerging middle classes, overseas businesses, expatriates and tourists is strengthening. The Company currently has modern hospital facilities in Dar es Salaam (Tanzania), Maputo (Mozambique) and Harare (Zimbabwe) together with an air ambulance service. Group turnover for the year more than doubled to $5.4m (2010: $2.1m) but with an operating loss of $18.7m including the one off cost of the irregularities.

Amerisur Resources (AMER 16.62p / £152.08m)
Updating on its Paraguay operations, Amerisur announced that senior executives from the Company, accompanied by Professor Victor Graterol, held a detailed briefing with the Paraguayan Minister and Vice Minister of Works and Communications, along with the Director of Hydrocarbons to provide an update on the Company’s recent Aeromagnetic and Gravity survey. Professor Graterol, a consultant to the Company, is a world expert on geophysical analysis and gravity and has been examining sedimentary basin surveys for over 30 years. The Minister was informed that initial analysis was encouraging and that a full detailed report would take approximately nine months to complete. This would then enable Amerisur to select with greater clarity appropriate areas for seismic surveys; given that the San Pedro block is over 800,000 hectares and only 40,000 hectares have ever been surveyed seismically. In addition, Dr John Wardle, Chief Executive, has been completing the final aspects of the Company’s work to obtain its environmental licence modification to build access roads for the new wells in the Platanillo Field in Colombia, which the Company believes will be approved in the near future.

Baobab Resources (BAO 19.75p / £37.06m)
Baobab Resources, an iron ore, base and precious metals explorer, reported on its Tete iron, vanadium and titanium projects in Mozambique that 113m tons of inferred resource at South Zone, calculated by Coffey Mining Limited in accordance with the JORC code, brings global inventory to about 161m tons. The resource remains open along strike and at depth. Drilling has been completed at Chitongue Grande Extensions with resource estimation due to commence shortly. Drilling is nearing completion at Ruoni North and South. First analytical results are due out in the coming weeks and resource estimates are scheduled for October.

Clarity Commerce Solutions (CCS 14.25p/£5.9m)
Clarity Commerce Solutions, the point-of-sale software solution provider, has provided its final results for the year to 31 March 2011. The Company’s revenues increased to £19.9m (2010: £19.1m), gross margins improved from 81.6 per cent to 83.1 per cent, though a loss before tax was recorded of £1.435m (2010 profit of £1.439m). Sales to the retail sector failed to come to full fruition during the 12 months, though the opportunities are still believed to be very much in the pipeline, whilst sales in the entertainment sector helped the position and are likely to be a focus for the Company going forwards. Though cash levels are relatively modest (£0.2m, 2010: £1.1m), a refocusing on value add ‘bolt-on’ style software is one key strategy that is being employed and a cost cutting exercise has been initiated to help improve the Company’s margins. Clarity has positioned itself clearly now to help build momentum in the year ahead, and we look out for further news about the business.

Cluff Gold (CLF on AIM and CFG on TSX 96.5p / £127.24m)
The dual AIM/TSX listed West African focused gold mining Company announced the results of an independent mineral resource estimate for the Company’s 100 per cent owned Baomahun Gold Project in Sierra Leone. The indicated resources have increased to 2.1m ounces of gold (25.6Mt grading at 2.5g/t) representing a 46 per cent increase over the measured and indicated resources announced in June 2010. Inferred resources now stand at 0.9m ounces (9.6Mt grading at 2.8g/t). These new resource figures will be incorporated into the definitive feasibility study for Baomahun, which is progressing well, and is expected to be completed during Q4 2011. Peter Spivey, Chief Executive Officer of Cluff Gold, commented: “The new resources underline the opportunity for Cluff Gold to achieve its objective of developing an open-pit gold mine at Baomahun, which has the potential to produce over 150,000 ounces of gold per annum.” It is thoughts that there is significant potential to further expand the resource base at Baomahun and work is progressing well on the definitive feasibility study, which is on track for completion during Q4 2011.

Craneware (CRW 526p / £140.93m)
Craneware, the Edinburgh headquartered provider of automated revenue integrity solutions for the US healthcare market, announced results for the year to 30 June 2011. The Company announced a revenue increase of 34 per cent to $38.1m (2010: $28.4m) and a 19 per cent increase in profit before tax to $8.7m (2010: $7.3m). Total dividend for the year amounts to 8.8p per share (2010: 8p per share). 1,500 US hospitals now use Craneware software, which is a key milestone for the Company, whilst a leading indicator used by the Company to measure performance, which is the acceleration of the Recovery Audit Contractor programme, is currently taking place and is expected to increase demand in future years. A healthy set of results for the Company.

DDD Group (DDD 29p/ £38.74m)
DDD Group, the Company that is engaged in the development and licensing of software and hardware intellectual property and technologies for the conversion of 2D content to 3D (and also the supply of originally made 3D content), announced last week that it has signed a five year license agreement to bundle TriDef® 3D PC software products with a leading PC maker’s line of 3D PC products. This is expected to generate revenues in excess of $1m, with an expected 1 million licenses estimated to be shipped in the 12 months starting October 2011. The 3D stereoscopic rendering capabilities enable 3d gaming on low cost PCs with few compromises and allow more than 500 of the latest PC games to be played in 3D even though it may not have been developed with such a capability in mind. Back in July, the Company announced that it had signed a two year license agreement with a mobile manufacturer to combine its TriDef 3D conversion software with the manufacturer’s latest Smartphones. The technology will allow users to benefit from glasses-free functionality.  This, together with the recent news of the PC bundling, demonstrates the versatility and appeal of the technology and we continue to look out for news on the Company with great interest.

DP Poland (DPP 87p / £17.21m)
DP Poland announced at the end of August that it had opened its fourth Domino’s Pizza store in Warsaw and that stores five and six are due to open shortly. The new store is located in the centre of Warsaw’s modern business district, on Marynarska Street and will cater to the needs of the thousands of professionals who live and work there. Stores five and six, scheduled to open this month, will be located north and west of the city centre. Peter Shaw, CEO said: “The Marynarska store is adjacent to areas covered by our first and third stores and has great potential to develop both a strong lunch time and evening trade. The store is highly visible and will be a flagship for us in the wealthy Mokotow district, as we continue to build our presence south of the city centre.”

Eleco (ELCO 14.5p / £8.80m)
Eleco last week announced the divestment of its UK timber frame manufacturing interests in accordance with its stated policy of reducing its financial risk exposure to its loss making manufacturing and contracting interests. The Company also announced the acquisition of N&S (Nilson & Sahlin Arkitekter AB), an architectural practice based in Sweden which will expand and strengthen Eleco’s existing Swedish architectural and design practice.

Fitbug Holdings (FITB 4.12p / £5.39m)
Fitbug Holdings, the UK online health and well-being provider trading on AIM has announced a Master Services Agreement (MSA) with a subsidiary of one of the largest health insurers in the US. This will give Fitbug a market of more than 60 million people. Under the MSA agreement, which will be implemented over the next six weeks Fitbug’s products and services will be made available to its online health and wellness market, which will be available to the US public and insured customers. It will also make services available to around 12 million participating corporate employees through a network of online suppliers of health and wellness services which are offered on preferred terms. Fitbug Executive Chairman Fergus Kee has commented on the importance of the scale of the deal saying: “As a small UK health business, accreditation as a supplier to one of the largest participants in the US health market is a really important step on our journey to build a profitable business in the US.  Our previously outlined plans to develop in the US are progressing very well and we will provide a further update with our interim results later this month.”

Fusion IP (FIP 23.5p / 12.75m)*
Fusion IP, the university IP commercialisation company that turns research into business has announced an end of year update for some of its portfolio Companies. Simcyp, Fusion’s simulation Platform Company for the pharmaceutical and biotechnology market, continued to grow strongly in 2010/11. Simcyp expects to exceed its forecasts for the seventh year in a row, with an expected 25 per cent increase in turnover and 35 per cent increase in profit before tax. In July, Phase Focus, Fusions microscopy and imagining company, raised £865,000 in equity investment to expand its operations, grow sales and conclude commercial deals with its commercial partners. As a result Fusion’s stake will be reduced by 49.1 per cent on an undiluted basis. In August, Diurnal, the Company’s drug development Company, completed a £335,000 funding round to allow for a continuation of some clinical rounds. Also that month, Mesuro, the Company’s Radio Frequency technology Company has also made its first sales during the year and raised a further £440,000 to support its growing sales activity.Magnomatics, the magnetic motor company continues to grow strongly and won prestigious new clients in the automotive, aerospace and defence sectors. Turnover is expected to grow by 70 per cent for the period ending December 2011 as product development continues. Seren, Fusion’s LED business, is closing its first commercial deals. Asalus, Fusion’s medical device company has generated interest in its Innervision product as it continues to satisfy expectations. These activities, along with other events in the financial year are expected to lead to a significant uplift in the valuation of Fusion’s portfolio companies. Preliminary results for the year end July 2011 are expected the week beginning 10th October.

GGG Resources (GGG 23.88p / £39.57m)
GGG Resources has announced its six month interim results ended on 30 June 2011. There have been several successful highlights for the company in the last six months that are worth noting. The first is the Company has successfully raised $8.1m of capital from institutional and retail shareholders after having listed on the Australian Stock Exchange in May 2011. During this period GGG resources also launched a takeover bid for its partner in the Bullabulling Projects, Ausex Resources. This will see the project coordinated by a single corporate entity if the bid is successful. The joint venture has already completed a 35,000 metre drilling, with the intention of converting a large portion of the Inferred Resources into Indicated Resources under the Phase One drilling programme. The Phase 2 drilling programme is already under way and will see the programme drill an additional 90,000 metres. This will consist of 70,000 metres of infill drilling to further increase the Indicated Resource category base and 20,000 metres of exploration drilling. The Company has also made plans for further exploration in the region. The plan is to start on a 194,000 drilling programme. Thus far the results from the drilling continue to confirm and expand the current resources model, and include high grade intersections.

Lupus Capital (LUP 89p / £115.56m)
The international supplier of building products to the door and window industry and a manufacturer of marine breakaway couplings, reported a 4 per cent fall in first-half pretax profit following softened demand in the U.S. and U.K. building products markets during the second quarter.  However they expect to trade satisfactorily for the second half year provided there is no significant further deterioration in its end markets. Thus far Lupus has been able to pass on input price rises to maintain margins. On a very positive note, last year’s restructuring of the business and total overhaul and extension of the financing – with a fixed facility in place for the next four full yearperiods – allows Lupus to focus on the introduction of new products and to take market share from weakened competitors without needing the market to recover.

Max Petroleum (MXP 12.75p / £117.69m)
Max Petroleum, an oil and gas exploration Company focused on Kazakhstan, announced that the UTS-3 confirmation well in the Uytas Field has reached a total depth of 825 metres, with electric logs indicating a total of 31 metres of net oil pay in Cretaceous and Jurassic formations. This includes 17 metres of net oil pay in Cretaceous sandstone reservoirs at depths ranging from 120 metres to 150 metres, with porosities ranging from 25 per cent to 34 per cent. In addition, 14 metres of pay are indicated in Jurassic reservoirs at depths ranging from 422 metres to 509 metres. The Company will complete and test the well using a workover rig after obtaining the requisite governmental approvals. The Company plans to drill one additional appraisal well in the field during this month and acquire a high-fold 3D seismic survey over the Uytas structure in October, in order to facilitate preparation of a long-term appraisal and development programme for the field. The Company also announced that it has commenced drilling the UTS-4 appraisal well on the Uytas prospect in Block A. The total depth of the well will be 800 metres, targeting potential Cretaceous and Jurassic reservoirs.

Minera IRL (MIRL 77p / £92.08m)
It’s another gold medal for Minera, in Peru (not Korea). The Latin American Gold Mining Company has published a technical report on the pre- feasibility studies for its Ollachea Gold Project. The study indicates robust economics for a nine year mine life which will produce over 1m ounces of gold at a cash operating cost of USD 436 per ounce. A full feasibility study and 1.2km exploration drive has now been initiated. In the separate Don Nicolas project, we await the feasibility study due in November.

Monitise (MONI 36p /£253.10m)
Monitise, which provides end-to-end solutions that enable banks and their customers to undertake banking transactions via mobile phones, announced preliminary results for the 12 months to 30 June 2011. Impressively, the Company achieved a 133 per cent increase in revenue to £14m (2010: £6m), with gross margins in excess of 60 per cent and an order book that continues to grow, having hit £78m at 1st September 2011 (June 2010: £13m). The Company reduced its loss for the period to £14.5m. Highlight events for the period include a substantial growth in live transactions, to more than 10m per month, a new 5 year agreement with Visa Inc to accelerate the development of its mobile services globally, a strategic agreement with Visa Europe to develop and supply mobile payments services for Visa Europe’s 4,600 member banks and financial institutions as well as a number of new agreements and investments worldwide to help broaden the presence and operational scope of the business. The Company has gone from strength to strength over the last few years and believes it continues to be on track to breakeven in 2013.

Motive Television (MTV 0.28p / £4.48m)
MTV announced it has made significant progress towards the first commercial implementation of its Television Anytime technology in the satellite broadcasting sector. Motive confirms that the deal announced last year by its majority-owned subsidiary, Adecq Digital S.L., worth $1.1m in revenue in the first year is with Sagemcom, a European provider of Digital Set Top Box solutions. Field trials with the first batch of set-top boxes are planned for early autumn, with a commercial launch scheduled for the end of this year.

Oxford Pharmascience (OXP 2.25p / £10.44m)*
Oxford Pharmascience, the pharmaceutical company specialising in drug delivery technology announced it has signed an exclusive option for 18 months to licence and research an advanced colonic delivery technology with the intention to develop and commercialise the application. The platform technology has been developed by a team at the London School of Pharmacy to provide superior control for drug delivery to the colon. This break-through drug targeting technology can be used as a means of achieving localised therapy for diseases such as irritable bowel syndrome and constipation, but it is importantly a portal entry of drugs into the systemic circulation which provides the potential for improving the clinical profile of certain drugs. Chief Technology Officer, Marcelo Bravo, has noted the positive opportunities this deal will bring to the Company, commenting: “Accessing cutting edge technology from a strong academic partner such as the London School of Pharmacy gives Oxford Pharmascience significant capability to innovate and extend the lifecycle of off-patent and soon to be off-patent drugs. The superior colon targeting and drug release profile achieved by London School of Pharmacy’s drug delivery technology will enable us to develop a next generation application for a major drug category across markets worldwide.”
Oxford Pharmascience has also and earlier in the summer announced its expansion into the Brazilian pharmaceutical market. It has commenced its first shipments of product to Brazil following an exclusive licensing and distribution agreement with Ache Laboratorios Farmaceuticos earlier this year. A first order valued at £105,000 has been placed and will follow by trade sales later on in the year. Ache is one of Brazil’s largest pharmaceutical companies distributing over 250 brands of prescription and generic drugs and OTC products.  Under the terms of the seven year agreement, Oxford Pharmascience will supply Ache with healthcare products which will be sold under a new women’s health brand, called ‘Inellare’. The first product is a Calcium and Vitamin D product based on Oxford Pharmascience’s solid state suspension technology which allows for superior taste masking and very rapid dissolution of active ingredients. Laboratory dissolution tests have shown significant improvements in dissolution of this system relative to standard calcium tablets and chewable tablets. The Company anticipates it will be developing a number of products for Ache’s ‘Inellare’ product range using its own intellectual property. Oxford Pharmascience has already begun testing several concepts in Brazil to expand the range following the launch of the initial first product.

Plexus Holdings (POS 71p / £56.93m)
Four straight A *s for Plexus: Since writing about Plexus’ £1.7m Gaz de France deal in early August,  the Small Cap Wrap has been on holiday but Plexus has been getting  results. In the last month, it has announced no less than four new deals for its proprietary well-head “Pos-Grip” technology. Deals worth; £250k with Dana Petroleum; £2m with Transocean; US$ 1m in Malaysia; and £800k with Centrica. Some are new business and some expansion of existing deals.   Either way it is all very positive news for the technology and the business of designing, assembling, supplying and maintaining wellheads.

Polo Resources (POL 5.29p / £123.77m)
Polo Resources, the natural resources company with a range of projects in coal, iron and gold, announced more than doubled pre-tax profit for the year to June 2011, reflecting gains from asset disposals. Pre-tax profit rose to £66.9m (2010 £28.8m). The Company realised a gain on disposals of £72.95m (£20.1m) and investment income of £2.7m (£774k). As at August 31st, the Company had a cash balance of $37.5m compared to $37.8m a year earlier. Executive Co-Chairman and Managing Director Neil Herbert said: “The Company’s strong cash position allows the board to evaluate new projects, both listed and private, with the view to making additional investments that fit our investment criteria.”

Prosperity Minerals (PMHL 112.5p / £161.31m)
End of the Iron Age at Prosperity Minerals.  The Chinese iron ore trading business, real estate owner and developer and cement manufacturers have announced the proposed disposal of the Iron Ore Business and payment of a special dividend. The Disposal will enable Prosperity to focus on its real estate investment and development business in the PRC.  The value of the Iron Ore Business is approximately US$38.6m (£23.8m). The effect of the proposals is the payment of a dividend of US$0.42 per ordinary share with Prosperity Intl Hlds Ltd (PIHL) receiving the Iron Ore Business as part payment of its dividend entitlement in lieu of cash.  Subject to shareholder approval being obtained, completion of the Disposal is expected to take place by the end of October 2011. Payment is expected to be made in early November.

ReNeuron Group (RENE 4.65p / £28.82m)
ReNeuron provided an update on progress with the PISCES Phase I clinical trial of its ReN001 stem cell therapy for disabled stroke patients. The independent Data Safety Monitoring Board (DSMB) for the clinical trial has recommended that the trial advances to the evaluation of a higher dose of ReN001. In arriving at this recommendation, the DSMB reviewed safety data from the first dose cohort of three patients treated with ReN001. No cell-related adverse events have been reported in the clinical trial and data from the laboratory safety tests, neurological examinations and neurofunctional tests conducted thus far indicate that the ReN001 treatment is safe and well-tolerated at the initial dose. Although preliminary in nature, these data have also enabled some early progress to be made regarding the secondary objective of the trial, namely the evaluation of appropriate clinical measurements for use in the design of future proof-of-concept clinical trials with ReN001. As previously reported, the Company expects that the next dose cohort of three further patients will have been treated by the end of this year assuming no significant recruitment delays. The remaining dose cohorts in the PISCES trial are expected to be treated in 2012, at which point ReNeuron intends to have discussed and agreed its subsequent clinical development strategy for ReN001 with the relevant regulatory authorities both in the UK and beyond. Michael Hunt, Chief Executive Officer of ReNeuron, said: “We are delighted that the DSMB have given a favourable recommendation to proceed to a higher dose in the PISCES stroke trial…We look forward to providing further updates on the PISCES clinical trial in due course.”

Scotty Group (SCO 7.38p / £2.04m)
A developer of video and audio telecommunication systems, said Monday it won a new contract for the delivery and integration of three vehicular video-satcom workstations for one of Europe’s leading armies, which cannot be identified for confidentiality reasons.  The contract is worth €1.4m of additional revenue. The first vehicle incorporating the workstation is expected to be completed in Q4/2011 and vehicles two and three are expected to follow in Q1/2012. This is the first contract where the Company will provide its latest airborne technology to be integrated into an armed vehicle for the purpose of its use in a “Combat Camera Team” scenario.  Beam me up…

Service Power Technologies (SVR 9.6p / £18.24m)
Market leader for outsourced service and field management announced its half-yearly report for the period ended 30 June 2011. Results were slightly ahead of notified expectations; revenues of £6.5m (2010: £10.0m); gross profit margin significantly increased to 57 per cent (2010: 23 per cent); and profit before tax of £0.9m (2010: £0.7m). The cash balance was £3.8m as at 30 June 2011 (30 June 2010 £3.4m). A high level of contract wins in the period, including Homeserve, Steritech and Richer Sounds, provided strong foundations for future growth and the Company signed a transformational revenue share agreement with Assurant Solutions, leading to a significant Tier 1 retailer contract. Mark Duffin, CEO, ServicePower said: “With increasing revenue visibility and a growing core of customers, we enter the second half of the year with confidence.”

Summit Corporation (SUMM £6.75p / £12.49m)*
Summit, the UK drug discovery Company with a portfolio of drug programmes and an innovative technology platform, Seglin, for the discovery of new medicines announced its interim results. The Company has had a successful £1.35m fund-raise completed in July 2011 shares at 8p per share. The cash position for the Company at 31st July 2011 was £3.7m, which gives Summit cash resources until September 2012, beyond the receipt of payments from new deals.

Surgical Innovations Group (SUN 12.75p / £50.33m)
AIM listed designer and manufacturer of innovative medical devices announced that it has signed a Development and Pre-Supply Agreement with Advanced Medical Solutions Group (AMS 76.5p / £118.72m) for the development and supply of a novel device for internal application of adhesives and sealants. Surgical Innovations will develop and retain the intellectual property rights for a unique applicator to deliver accurately individual drops of adhesive or sealant internally within the body, accessed via a minimally invasive surgical port site. In return for the worldwide exclusive rights to this applicator for the internal application of adhesives and sealants, AMS has agreed to purchase all of its requirements for the approved new applicator from Surgical Innovations for a period of ten years. AMS has indicated that the first target internal application will be the hernia mesh fixation market, which is currently served by sutures, staples and tacks. The new internal applicator, together with AMS’s adhesives, will address this important market with reduced surgical complications.

Touchstone Gold (TGL 26.12p / £27.09m)
Touchstone Gold announced that it has continued to explore the Rio Pescado property to expand its resource potential. Three new mineralisation areas have been identified and existing mineralisation areas have been confirmed. As a result, the known mineralisation area has approximately doubled. Work has commenced to identify additional mineralisation areas. Drilling has started on previously identified zones, with initial results expected in October. The process of permitting for the new mineralisation zones has commenced.

Zeta Compliance Group (ZCGP.PL 50.5p / £4.43m)*
Zeta has announced that its subsidiary, The Fire Strategy Company Ltd has won a competitive tender to provide Fire Risk Management services to BT Group. This will see Zeta provide risk management solutions across 1,400 of BT’s portfolio sites. Work on this contract will start immediately and be delivered by the end of March 2012.  The Company has further announced unaudited results for the six months ending 31st July 2011. The Company has continued to grow with turnover increasing by 22.2 per cent in H1; this includes the contribution from The Fire Strategy Company Limited. Profit before tax increased by 64.2 per cent and EBITDA increased by 3.6 per cent in H1.

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The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.