Small Cap Wrap: Month: March 2013

AIM Breakfast - Archive

19 March 2013

This week: New light at LGT, revenue flows at Hydro, and EKF diagnosis

The inaugural Small Cap Awards, supported by the London Stock Exchange and ISDX, is taking place on 24 April 2013 at BAFTA, Piccadilly. For details please visit

Last week saw the FTSE 100 close near to where it started at 6,490 points, and the AIM All Share too closing at 747 points. News came in the form of weak manufacturing data in the UK, with output falling by 1.5 per cent, following a 0.9 per cent rise in December adding to fears the UK will dip back into recession, whilst consumer price inflation rose to 2.8 per cent in February partly as a result of rising energy costs. Wednesday sees the Budget taking place, and amongst the announcements, an extra £2.5bn of spending cuts are expected to be announced with the savings going to large-scale infrastructure projects to boost economic growth. The week ahead also sees Budget, Monetary Policy Committee meeting minutes, unemployment data, and public sector borrowing and retail sales data.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

BGO reports 9 months results, BZT Return of Capital, CLL Annual results, CGH Tulkubash update, CTEK Acquisition of Land Use Right, DKL AIM listing, EKF Final results, GAS Loan Agreement, HYR Final results, LGT appointment of NED, LMT Milestone Achieved, MSYS New Chip-based Mass Spectrometry Instrument, NPT ITV Three-Year Broadcast Agreement, PYC clinical PK/PD modelling services, PHD JV in the Indian Market, SPH Disposal of Fazol G, SRT US$7m Orders, SOG Partnership with Interactive Data, TEG Full year results, UBI New Deployments & Preliminary Results, VENN NED appointment

Bango (LON:BGO 265p/£120.53m)
The mobile web payments and analytics company today announced its final results for the nine months ended 31 December 2012. The results for the year do not include any material income from the agreements signed with Amazon, Google, Microsoft, MasterCard and Facebook, but do include costs relating to the establishment of these relationships. Turnover for the nine months of £7.4m was reported (12 months to 31 March 2012: £15.6m), reflecting the shorter accounting period and the managed phase out of the feature phone business. A gross profit for the nine months of £1.58m was made (12 months to 31 March 2012: £2.29m). The total loss after tax was £2.4m (12 months to 31 March 2012: loss of £0.93m).  Technology and personnel investments to support the continued growth of the business were made, alongside an increased spend to prepare for the forthcoming release of BlackBerry 10. Bango raised £3.25m from existing shareholders in June 2012. Bango holds over 200 million billable identities, with a total reach exceeding 1 billion mobile phone users and is connected to 90+ mobile operators across 5 continents. It has a strong momentum with industry leaders; including a roll-out with Facebook across the USA, UK, France and Germany; the first Google Play operator billing live in December 2012 with Telstra in Australia; and Microsoft’s Windows Phone Store integration is underway in the initial countries. Analytics transaction volumes continued to grow at increasing rates. Bango has had a major platform upgrade to improve capacity and security. Product development includes new releases of Bango Payments and Bango Analytics. The management team has been strengthened with the recruitment of a CFO and COO. Post period end, a Global Framework Agreement was signed with Telefónica Digital in January 2013 and BlackBerry10 was launched in January 2013. Bango also again raised £6.5m from institutional investors in February 2013 to strengthen its balance sheet and take advantage of developing opportunities in emerging markets and further business development with major mobile network operators.

Bezant Resources (LON:BZT 24.75p/£20.53m)
Bezant, the gold and copper exploration and Development Company operating in the Philippines and Argentina, announced that had posted a circular containing details of a proposed return of capital to its Shareholders, together with formal notice of the requisite general meeting. The Board is unanimously recommending a capital return of approximately £5.2m (8p per Share) to Shareholders, other than Gold Fields, subject to the receipt of Shareholder approval at a duly convened General Meeting. Bezant will remain well funded to pursue its current work programme on its Eureka copper-gold exploration project in Argentina following completion of the proposed return of capital.

Cello Group (LON:CLL 44.75p/£36.86m)
The insight and strategic marketing group announced results for the year ended 31 December 2012. Revenues for the period increased to £135.1m (2011: £127.7m) though profit before tax fell marginally to £7m (2011: £7.1m). A restructuring plan to have two divisions to the Group – Cello Health and Cello Consumer – was also completed during the period, with Health now having a full years contribution from MedErgy which was acquired in April 2011 and Cello Consumer seeing a recovery in the second half after a marked slowdown in the first half caused by a hiatus in research activity by clients. 46.1 per cent of total Group gross profit (2011: 40.6 per cent) had come from abroad, with the figure for Cello Health alone being 72.3 per cent. Having completed the acquisition of Mash Healthcare Limited (Mash) in January 2013, for a total maximum consideration of £1.5m payable over the next 18 months, and investing in a number of new start-up activities in 2012, the Company believes it is in a good position to progress against its growth goals and is confident that current expectations for 2013 can be met.

Chaarat Gold (LON:CGH 24p/£60m)
Chaarat Gold, the gold exploration and development Company with assets in the Kyrgyz Republic, has provided a project update on the Tulkubash project, which is part of the Chaarat project area located in the north west of the Kyrgyz Republic. Production is expected to commence in the second half of 2013 using heap leaching, rather than the CIL (Carbon in leach) method originally anticipated, which will cut capital cost and power requirements. These savings have been offset by the effect of the changes in the new tax regime which will have a negative effect of about $15m on cash flows. However, the gold resource has increased by 3 per cent to 5.76m ounces following the 2012 drilling season.

China Chaintek United Co., Ltd (LON:CTEK 236.5p/£129.36m)
Chaintek this morning announced that it has acquired a Land Use Right (LUR) relating to a plot of land of 145,600 m2 from the Government of China. The acquisition is in line with Chaintek’s stated strategy of acquiring an LUR on which to construct a new logistics park, as detailed in the Group’s AIM admission document and the trading update announcement on 31 October 2012. The plot of land is located 14 km from the Group’s existing operational headquarters in Jinjiang, and is situated in an industrial zone which already houses a number of Chaintek’s existing manufacturer customers. The consideration payable for the LUR is RMB 221.0m (approximately £22.1m), which is in addition to the RMB 52.0m deposit already paid in 2011, and is payable in three tranches. The initial payment of RMB81.9m (approximately £8.19m), which was the final condition required for completion of the acquisition, was made on 18 March 2013, with the second payment of RMB 84.5m (approximately £8.45m) payable on 6 April 2013. The final payment of RMB 54.6m (approximately £5.46m) is payable upon commencement of construction of the logistics park, which the Company anticipates starting in the second half of 2013. These payments are being made from the Company’s existing cash balances.
The Company will update the market in due course with any further details regarding the construction of the new logistics park. In addition, the Company has recently arranged a bank loan facility of RMB50m (approximately £5.0m). The coupon payable on the facility will be determined at the time of draw down (but would be 6.8 per cent based upon current rates) and is repayable one year after the draw down. It has been provided by Bank of China and will be used to provide additional working capital for the Company.

DekelOil (LON:DKL 1.1p/£14.3m)
DekelOil, a palm oil development company with interests in Côte d’Ivoire, was admitted to AIM on 18th March 2013, following a completion of a placing of 170m new shares at 1p per share to raise £1.7m (before expenses). The funds raised, together with the existing project finance, will be principally used to complete the construction of a 60 ton per hour palm oil extraction mill, in conjunction with its 49 per cent joint venture partner, the Siva Group. Upon completion of the construction, which is expected to be by the end of 2013, the mill will be one of the largest in West Africa with a capacity to produce up to 70,000 ton of CPO (Crude Palm Oil) per annum.

EKF Diagnostics (LON:EKF 25.5p/£69.54m)
EKF Diagnostics, the point-of-care diagnostics business, has announced final results for the year ended 31 December 2012. Revenues were up by 20.3 per cent to £26.1m (2011: £21.7m) and pre tax losses narrowed to £196,000 (2011: loss £2.4m). Net cash on the balance sheet was £2.0m (2011: £2.8 m). Four acquisitions completed from July 2010 to June 2011 formed a core part of the business in 2012, and post period end the Company announced the acquisition of 360 Genomics Limited, which develops diagnostic technologies to determine the most appropriate and timely therapies for cancer patients, and is expected to form the new operating business, EKF Molecular Diagnostics. The commercial launch of the Quo-Lab HbA1c analyser for emerging markets in July 2012 was followed by sales of 600 units by the end of February 2013, whilst HemoPoint H2 also performed well with strong sales in North America since April 2012 which drove consumables sales in 2013 and a further order for HemoPoint H2 cuvettes from the Mexican Institute of Social Security ($0.7m recognised in 2012, $1.4m in 2013).

Gasol (LON:GAS 21.25p/£7.12m)
Gasol, the West African energy development company, announced that it has entered into a convertible loan agreement with Socar Trading S.A. (STSA). STSA has agreed to lend Gasol US$1m in the form of an unsecured sterling convertible loan note with a term of two years at an annual interest rate of four per cent. STSA is the international marketing and development arm of SOCAR, the State Oil Company of Azerbaijan. The loan reinforces STSA’s commitments to supply Liquefied Natural Gas (LNG) and assist Gasol with the provision of floating gas storage and regasification facilities for its proposed LNG Import project in Cotonou, Benin. These commitments are detailed in a Letter of Undertaking which the parties have also signed.

Hydro International (LON:HYD 100.5p/£14.43m)
Hydro International, a leading provider of environmentally sustainable and innovative products for the control and treatment of water, has announced final results for the year ended 19 March 2013 which saw revenues increase by 12 per cent to £34.7m (2011: £31.1m), though a slight reduction in profit before tax to £2.3m. The US and UK continued to form the focus for the Company’s Wastewater business, with major contracts continuing to be secured, such as the award of Bonnybrook WWTP in Canada worth CDN$4m in June 2012, and a US$3.6m project in Dallas early in 2013. In the UK, project flow from AMP 5 helped to increment the continued delivery of three Zickert Scraper contracts for Thames Water to deliver record divisional revenues. The Thames Water contracts are collectively valued at £22.8m, and are expected to be largely completed in the coming year. The completion of major contracts at Thames Water has primarily resulted in the Group’s order book falling to £11.6m (2011: £18.8m).  Interestingly, the Company also started working with a new international distribution partner in Russia which has already secured an early contract for the EUR2m redevelopment of St. Petersburg International Airport.

Lighthouse Group (LON:LGT 3.62p/£4.63m)
The largest listed UK IFA advisory business this morning announced the appointment of Fay Goddard as a non-executive director of the Company. Fay will take up the position on 1 April 2013. Fay has over 25 years’ experience in the UK financial services sector. She is shortly to retire from her current role as Chief Executive of the Personal Finance Society, the UK’s leading professional body for financial planners and part of the Chartered Insurance Institute, the world’s largest professional body for insurance and financial services. Fay was previously Deputy Director General and Policy Director at the Association of Independent Financial Advisers.

Lombard Medical Technologies (LON:LMT 203p/£40.93m)
Lombard Medical Technologies,  the specialist medical technology company focused on innovative vascular products, announced the determination of satisfaction of the FDA Milestone requirements for the Second Tranche of the two tranche placing and subscription announced by the Company on 20 April 2011. This is the trigger for the transfer of the £14.1m Second Tranche subscription monies and the application for admission of shares on the London Stock Exchange both of which are anticipated by the middle of April 2013.

Microsaic Systems (LON:MSYS 43p/£18.29p)
The high technology company developing next generation mass spectrometry instruments will showcase its new revolutionary chip-based technology for the first time on booth #2255 at PITTCON 2013, from 17-21 March 2013 at the Pennsylvania Convention Center (Philadelphia, PA, USA). Microsaic Systems is the only producer of mass spectrometry instrumentation using Micro-Electrical-Mechanical Systems (MEMS) technology. The significant and innovative advances in the new chip-based instrument, the Microsaic 4000 MiD, offers a redesigned unit with an even smaller footprint. Microsaic Systems is the first and only company to have commercialised MS (mass spectrometry) technology on a chip based on MEMS technology originating at the highly regarded Optical and Semiconductor Devices Group at Imperial College London. The Company’s breakthrough product, the 3500 MiD launched in January 2011, represented a step change in the ease of use and footprint of mass spectrometry. The instrument won an R&D 100 award from an independent judging panel and the editors of R&D magazine due to it being smaller, lighter, consuming less energy, easier to maintain and cheaper to run than conventional MS systems.

NetPlay TV (LON:NPT 18.38p/£52.59m)
NetPlayTV, the interactive gaming company, last week announced that the Company has signed a new three year broadcast agreement with ITV. The agreement will see NetPlay increase its live broadcast on ITV to six nights a week from Monday to Saturday and provide the Company with access to ITV’s online inventory. The broadened relationship compliments the approach of targeting new customers via Mobile, TV and Online. NetPlay has been working with ITV since 2010 and this new agreement will significantly increase the customer reach.

Physiomics (LON:PYC 0.12p/£1.73m)
Physiomics, the Oxford, UK-based systems Biology Company, announced the launch of its new clinical PK/PD modelling service. Large pharmaceutical and biotechnology companies routinely outsource clinical PK/PD work, which is used primarily to determine the appropriate dosing and scheduling of a drug in man to maximise beneficial effects and minimise unwanted side effects. Physiomics has entered this field because it supports the Clinical version of the Virtual Tumour currently being developed and also because it now has experience of phases I/II PK/PD modelling in-house. Dr Mark Chadwick, CEO of Physiomics, commented: “This new service represents an important step towards applying all of our models to the clinical setting. By engaging with clinical project managers we aim to generate service revenue and also pave the way for future collaborations incorporating Virtual Tumour Clinical in particular.”

Proactis (LON:PHD 27.5p/£8.69m)
PROACTIS Holdings, a global Spend Control and eProcurement solution provider, announced the launch of its joint venture operation, Proactis Total Procure Private Limited (PTP), to provide its services to the growing Indian market. PTP will provide outsourced procurement services to the Indian market, initially incorporating procurement reviews, vendor networking, sourcing and contract management delivered using PROACTIS’ established global software platform and its procurement expertise.  In the first month of operation, PTP has already engaged in an exploratory project for the provision of these services to a global producer of recognised branded products to consumer markets. PTP has been established in collaboration with two joint venture partners, Khwantum Capital Private Limited and Avan Projects Private Limited. These partners provide an opportunity to accelerate commercial traction through access to a unique network of decision makers.

Sinclair IS Pharma (LON: SPH 26.5p/£115.25m)
Sinclair IS Pharma, the international specialty pharmaceutical company, announced the disposal of Fazol G for a cash consideration of EUR1.15m to Laboratoires Majorelle a French company specialising in the therapy area of gynaecology. Fazol G is used in the treatment of fungal infections and forms part of the Fazol brand family. Fazol G generated revenues of £0.4m in the last full financial year to 30 June 2012, 15 per cent of overall revenues of the Fazol brand. The disposal is in line with the Board’s strategy that planned non-core product disposals would finance a significant part of the EUR1.7m redundancy and outplacement costs that arise on the closure of the French factory. Sinclair IS has now covered all these costs from the proceeds of non-core product disposals in the current financial year.

Software Radio Technology (LON:SRT 22.25p/£25.79m)
Software Radio Technology announced that it has received frame orders worth over US$7m from customers located in North America. Approximately US$2.6m of the orders will be delivered during the current financial year ending 31 March 2013 with the balance to be delivered over time in response to market demand. The orders are for SRT’s AIS Class A product and are a result of a general increase in demand for AIS products worldwide and pending new mandate requirements in the USA which are expected to come into force during 2013. The orders are from longstanding existing customers who have been actively selling SRT’s AIS products for a number of years.

StatPro (LON:SOG 85p/£57.36m)
AIM listed provider of portfolio analysis and asset pricing services for the global asset management industry announced results for the year to 31 December 2012. The Company saw a slight increase in revenues to £32m (2011: £31.7m) though pre tax profits reduced to £3.8m (2011: £3.9m). In particular, revenues from StatPro Revolution, the cloud based portfolio analysis service, showed good growth to £1.51m (2011: £0.45m) and is being used by over 156 organisations. The bulk of revenues continued to be on annualised recurring contracts, up 4 per cent to £29.52m, with a contract renewal rate of 93 per cent (2011: 92 per cent). Having completed a placing in November to raise £5.81m after expenses, the Company looks well positioned to focus on building its distribution channels, for up-selling additional products. It will focus on the continued roll out of StatPro Revolution and an announcement today regarding a partnership with Interactive Data (a global data provider) will see further data coverage for Revolution being an example of its development. Partnerships are a core part of StatPro’s growth strategy, building an ecosystem of third party solutions available through the StatPro Revolution App Store, which both expand the breadth of the service and provide additional revenue streams. By integrating Interactive Data’s extensive award winning fixed income evaluations data into StatPro Revolution, StatPro’s cloud-based portfolio analysis platform, StatPro clients can now access evaluated prices for approximately 2.8m fixed income securities including investment grade and high yield corporate and sovereign securities, securitised securities and U.S. municipal securities. Available online in the StatPro Revolution App Store for a portfolio based fee, evaluated pricing data can be easily incorporated into any existing portfolio within StatPro Revolution. By acquiring the data through the StatPro Revolution App Store, clients have a one-stop-shop for data and analytics through StatPro Revolution.

The TEG Group (LON:TEG 6.5p/£12.25m)
The TEG Group, which develops and operates organic composting and energy plants, has reported a substantially improved set of results for the year ended December 2012. Revenues in 2012 rose 25 per cent to £22.4m while the operating loss fell to £1.2m (2011: loss of £7.9m). The second half of the year, in particular, saw a marked improvement in both revenues and profitability. The cash balance at the end of 2012 was £3.7m (2011: £1.6m). Operational revenues grew by 16 per cent in 2012 compared to 2011, with a 42 per cent increase in gross margin. The growth in the Company’s own plant operations reflects substantially increased productivity and utilisation, the continuous growth in the organics sector of the waste market together with some reduction in competitor capacity following stricter regulatory enforcement. The volume of food based waste grew by approximately 24 per cent. Since the year end, the Company has entered into a six year organic waste contract with a major waste management company. This will increase waste volume for the Simpro business by approximately 15,000 tonnes per annum.

Ubisense Group (LON:UBI 197.5p/£43.03m)
Ubisense Group a market leader in location based smart technology, made three announcements. First a high volume automotive manufacturer has more than trebled its deployment of the Ubisense Smart Factory System. The UK based customer already uses the RTLS solution in production to track and control thousands of cars and DC torque tools and has now expanded the applications into the off-tracks finishing area, providing an end-to-end solution for visibility and control across the whole factory floor. Second a South Korean engine manufacturer has selected Ubisense for its tool tracking solution and has commenced deployment on multiple engine assembly lines at their domestic plant. This leading South Korean industrial has selected the system in order to eliminate defects as early as possible during the assembly process. Third, Ubisense announced its preliminary results. The Group’s revenue increased by 2.1 per cent, to £24.3m and gross margins improved to 39.5 per cent (FY 2011: 35.6 per cent). Net cash was £2.7m following increased investment in the product suite.

Venn Life Sciences (LON:VENN 32p/£6.43m)
Growing Clinical Research Organisation (CRO) providing clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients, announced the appointment of Paul Kennedy as Non-Executive Director with immediate effect. Paul has an extensive career in the pharmaceutical industry having been President of Novo Nordisk France for 15 years and before that working as a Marketing Director for seven years at Abbot France and Boots, both in the UK and France. Having left Novo Nordisk in 1994, Paul set up his own pharmaceutical company, Laboratoires Murat, which was purchased by Fuisz Technologies Ltd, a Nasdaq listed drug delivery company three years later. Paul then worked as Executive Vice President, Operations for Fuisz Technologies in Paris before the business was sold to Shire plc in 1999 for a further premium. From 1999 to 2004 Paul worked as an Independent Consultant in the pharmaceutical industry. In 2004 Paul became President of International Operations at AIM listed medical diagnostics company Cozart plc, establishing their international organisation from a standing start. In 2007 Paul became a controlling shareholder and Director of US listed IVAX Diagnostics, Inc.

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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 March 2013

This week: Quarto publishes results, Surface transfers and a golden start to the year for  Silverdell

Last week saw the FTSE 100 close almost 100 points higher at 6,476 points and the AIM All Share 8 points higher at 748 points. News included the BoE keeping interest rates in the UK at 0.5 per cent, and the ECB continuing eurozone rates at 0.75 per cent. Construction output, according to the Office of National Statistics, was down in January 2013 compared to January 2012, whilst UK house sales hit their highest level in more than two and a half years with 17 homes being sold per surveyor. The week ahead sees the Bank of England Quarterly Bulletin being announced, together with UK trade and manufacturing output data, and next week sees the Budget taking place.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

BVM  Final Results, BGBL New deal, CIN launch of Therium Jersey Limited, DDD Lenov0 license renewal, FITB signs three Partnership Deals, FUM Preliminary results, HGV Disposal of Amaze, IDEA Contract Wins and Board Change, MSG MoU signed with London Football clubs, OMI Resignation of CEO, OXB TroVax(R) Phase II trial, QRT Final results, RENE wins two major Biomedical Catalyst grants, RLD Graphite Exclusivity, SHEP.PL Interim results, SID Trading update. SQS Final results, SDM Preliminary results, SUMM new OGA data, SCE Transfer Agreement, SUN International Clinical Advisory Board appointment, TRCS New Advisory Board

Belgravium (LON:BVM 3.25p/£3.28m)
The Board of Belgravium Technologies, designers and suppliers of computing solutions and services for mobile data capture applications to a wide variety of industrial sectors, announced its preliminary results for the year ended 31 December 2012.  Revenues declined to £8,669,000 (2011: £11,157,000) and profit after tax was £336,000 (2011: £876,000. The Company proposed to maintain the dividend of 0.1p and net cash grew to £1,566,000 (2011: £1,074,000) though EPS of 0.33p (2011: 0.87p). John Kembery, Executive Chairman, said: “After a successful 2011 which benefited from some large contracts, 2012 has proved a challenging year. Nevertheless, I am pleased to report that our results are in line with revised expectations. Our operational gearing means that we are sensitive to falls in revenue and in common with many companies; Belgravium has found it difficult to convert its sales pipeline into confirmed orders as customers continue to delay their investment decisions. We do not expect our markets to change significantly in 2013. However, the Group has a strong balance sheet and has initiatives in place which should ensure improved profitability in the current year.”

Bglobal (LON:BGBL 9.75p/£10.37m)
Bglobal, the provider of smart energy solutions and services to the UK energy market, announced that it has signed a deal with GnERGY Ltd, enabling GnERGY to become a dual fuel energy supplier. Bglobal’s subsidiary Utiligroup has a ‘Supplier in a Box’ (TM) solution for new market entrants offering an array of logistical and technical support, which will minimize the time it takes GnERGY to be operational in the market. This is the seventh company to take advantage of the solution, and includes access to Utiligroup’s full range of energy software, implementation services and consultancy from the ‘Client Solutions’ team, operational managed services and a license through the pre-accredited supply company ‘Lumen Energy Supply Ltd’.

City of London Group (LON:CIN 69p/£13.94m)
COLG is pleased to announce the successful closing of a new litigation fund, Therium Jersey Limited. Therium Jersey Limited is an Expert Fund established under the Jersey Expert Fund regime. Therium Capital Management Limited is COLG’s litigation funding subsidiary and is the exclusive investment advisor to the fund. IFM Trust Limited is the administrator. The new fund is the latest of TCML’s funds with a capital raise of £7.2m which will be invested alongside TCML’s earlier funds into the growing pipeline of investment opportunities (up 63 per cent in 2012). As at the closing of the fund, five investments recommended by TCML were approved for funding by the board of directors of Therium Jersey Limited.

DDD (LON:DDD 24.5p /£32.92m)
DDD Group, the 3D solutions company, has renewed the license agreement for its TriDefTM 3D software with Lenovo, which will use the solution in its growing range of 3D PC products. The popularity of 3D gaming is driving sales of 3D PC products in China and Lenovo’s Win8 3D products enable a huge number of the most popular Chinese and international games to be played in 3D. Lenovo is launching a full range of new Win8 All-In-Ones, desktops and monitors during the Spring of 2013. The TriDef 3D software will be supplied with Lenovo’s 3D PC products including the Lenovo All-In-One B3 and B5 series as well as the X and K series 3D Desktop models, to deliver 3D viewing using simple, lightweight polarised glasses, making it both cost-effective and convenient. DDD’s TriDef 3D automatically converts DVD movies, video and photo files from 2D to 3D. It also allows over 750 of the latest 2D PC games to be played in 3D “off the shelf”, even if the game was not specifically developed for 3D. Over 100 of those games are popular Chinese titles. Almost all 2D games that use DirectX 9, 10 or 11 can be played in 3D with TriDef. To ensure plenty of content for 3D viewing, Lenovo also includes a selection of original, high definition 3D programming available from, DDD’s 3D entertainment portal.DDD will continue to receive quarterly royalty revenues from Lenovo based on the volume of 3D PCs shipped.

Fitbug Holdings (LON:FITB 1.18p/£1.98m)*
Fitbug Holdings , the AIM listed provider of online personal health and well-being services, announced that it has signed partnership agreements with three leading wellness businesses in line with its strategy to increase its presence in the Connected Health Market, which is particularly buoyant in the US. The first is an Alliance Marketing Agreement with MyFitnessPal, the leading US based nutrition and fitness tracking app, to consolidate its food diary capabilities with Fitbug’s activity tracking capabilities – access to more than 30 million people. The second is an Agreement with Redbrick Health, a leading consumer health engagement and behaviour change technology provider, to integrate Fitbug data with Redbrick’s tracking, social challenge and rewards engine. And the last one is a partnership with wireless health innovator ConnectedHealth Pte. Ltd to combine both companies’ consumer health and fitness monitoring solutions with a focus on the US and Asian markets.  The agreements offer the potential to grow the Company’s customer base significantly according to the Company.

Futura Medical (LON:FUM 68p/£52.66m)
Futura Medical announced preliminary results for the year ended 31 December 2012. The Company saw a net loss of £2.18m (2011: £1.81m) and net cash inflow in year of £0.23m (2011: £1.76m). During the period, the rights for CSD500 were regained and it remains on-track for relicensing and regulatory approval during 2013. PET500 continued to await its US launch by Ansell under the LifeStyles(R) brand, whilst CRF100 (a cellulite reduction product) was reformulated and a new clinical study is underway. A placing was also completed in September which saw £2.08m raised at 2p, leaving the Company with cash resources of £2.82m (2011: £2.58m) at the year end.

Hasgrove (LON:HGV 75.5p/£17.71m)
Hasgrove, the digital and communication services group, has conditionally agreed to sell Amaze, its full service marketing and technology company, to St Ives Marketing Services Ltd. for a total cash consideration comprising a £15.3m initial payment payable on completion, which includes £1.8m repayment of intercompany debt and up to a further £9.7m payable conditional upon achieving certain profit targets in the year to 31 December 2013. The disposal is subject to shareholder approval. While Amaze has built a strong position in digital business solutions, the management concluded that this business needed an owner with the ability to increase investment to take it forward. New business opportunities at Amaze are being turned down due to a lack of resource. Following the sale of Amaze, Hasgrove will own three trading subsidiaries; Interact, The Chase and Landmarks. Management believes that these businesses address key market segments and offer growth potential. A proportion of the net disposal proceeds will be invested to accelerate the growth of Interact, particularly outside of the UK. Some of the proceeds of the disposal will also be invested in the remaining businesses for expansion and working capital requirements. Up to £1.9m will be used to fully repay bank loans.

Ideagen (LON:IDEA 22.88p/£27.85m)
Ideagen, a supplier of Compliance based Information Management, is pleased to announce continued robust trading and that it has signed approximately £700k of new contracts under the Scottish Framework Agreement within its recently acquired healthcare business, Plumtree Group Limited. The contracts are for the supply and implementation of dartEDM, Ideagen’s flagship Electronic Document Management solution to the Western Isles NHS Trust and Forth Valley NHS Trust, it is expected that 70 per cent of the contract value will be recognised over the next 12 months. These new contracts bring the total value of revenue generated under the agreement to approximately £1.2m. The integration of Plumtree into the Company is now complete and the Company has made a number of non-board management changes. Ben Dorks, formerly Sales Director of Plumtree has been appointed as the Company’s Group Sales and Marketing Director and Barnaby Kent, formerly CEO of Plumtree has been appointed Group Operations Director. Additionally Graeme Harrop, Chief Operating Officer, has stepped back from the PLC board but remains with the Company as Professional Services Director with responsibility for the delivery within and the on-going development of our major customers. Graeme was formerly Professional Services Director for Microsoft UK and will focus on ensuring the successful implementation of our largest programmes.

Milestone Group (LON:MSG 0.62p/£2.5m)*
Milestone, the AIM quoted provider of digital media and technology solutions, yesterday announced that it has entered into a Memorandum of Understanding (MoU) with ten London football clubs’ community trust schemes to deliver a pan London focused community football tournament in summer 2013. This tournament will supplement the launch of Milestone’s social engagement programme, the Passion Project, which was announced on 29 January 2013. The Passion Project will use a number of digital media and sports engagement tools to help young people identify skills, access training and employment opportunities. A wide number of key strategic partners have been involved in the creation of the Passion Project and further details will be announced in the near future.

Orosur Mining (LON:OMI 33.25p/£25.59m)
Orosur Mining, the South American focused gold explorer and producer, announced that David Fowler is to resign as Chief Executive Officer on 31st May 2013. The Company is in the process of recruiting a replacement. After lengthy discussions with the Board, it has been mutually agreed that David Fowler will step down as Chief Executive Officer. David will continue in his current role until 31st May 2013 in order to effect an orderly handover. David joined Orosur as Chief Financial Officer in 2004 and became Chief Executive Officer in 2006; the terms of his severance and engagement after that date are in the process of being finalised. The Company also announces that its production for the third quarter ended 28th February 2013 was 18,401 ounces, resulting in year to date production for the 9 months of 47,822 ounces. The Company’s production forecast remains 63,000 to 68,000 ounces for the full year. The Board reported that it is confident that the Company remains on track to deliver the strategy that was outlined in October 2012.

Oxford BioMedica (LON:OXB 2p/£28.39m)
Oxford BioMedica, the gene-based biopharmaceutical company, has reported that its partners at the Velindre Cancer Centre in Cardiff have initiated a Phase II trial to assess the safety and immunological activity of TroVax(R), a therapeutic vaccine developed by Oxford BioMedica, in combination with first-line chemotherapy agents, pemetrexed and cisplatin, in patients with malignant pleural mesothelioma (MPM). The study will be funded by the June Hancock Mesothelioma Research Fund and the Velindre Cancer Centre Stepping Stones Appeal, and Oxford BioMedica will provide TroVax(R) . The Phase II study, entitled “SKOPOS”, will enrol 26 patients with MPM and will evaluate whether TroVax(R) is active in the treatment of MPM, assessed by measuring anti-5T4 immune responses following treatment in combination with pemetrexed and cisplatin. The study will also assess secondary measures of clinical benefit including progression-free survival, objective response rate and overall survival at six and 12 months.

Quarto (LON:QRT 147.5p/£30.16m)
Quarto, an international co-edition book publisher based in London announced final results for the year ended 31 December 2012, which saw a dip in both revenues and profit before tax to revenue of $180.9m (2011: $186.1m) and pretax profit for the year of $7.1m (2011: $9.4m) respectively. Changes in the shape of the business saw digital revenues become more pronounced, up 29 per cent to $2.7m (2011: $2.1m). On the operational front, Tim Chadwick was elected as Chairman in December 2012, and Marcus Leaver appointed COO at the end of April 2012 after which he was appointed CEO in December 2012. Further, Quarto announced its three current Non-Executives, Peter Waine, Peter Campbell and Edward Krawitt would not be seeking re-election to the Board at the Annual Meeting in May. A strategic review of operations is underway to help lift earnings and improve shareholder returns; though despite the challenges a final dividend of 4.55p per share was announced, taking it to 7.9p for the year.

ReNeuron Group (LON:RENE 2.76p/£21.39m)
ReNeuron Group announced that it has been awarded two separate grants, totalling £1.2m, from the UK Biomedical Catalyst to pursue further development of two of its core stem cell therapy candidates. The Biomedical Catalyst is a programme of public funding jointly managed by the Technology Strategy Board, the UK’s innovation agency and the Medical Research Council. The first award to ReNeuron of £0.4m is a Late Stage Biomedical Catalyst grant and relates to the Company’s ReN009 stem cell therapy candidate for critical limb ischaemia. The award will be deployed towards the funding of a UK Phase I clinical trial in limb ischemia patients. The Company will provide a further update on progress with this programme shortly. The second award of £0.8m is an Early Stage Biomedical Catalyst grant and relates to the Company’s ReN003 stem cell candidate for the treatment of retinitis pigmentosa. The award will fund the UK-based late pre-clinical development of this programme through to the clinic. This work is being undertaken in collaboration with the world-renowned UCL Institute of Ophthalmology and complements the Company’s existing long-standing collaboration on this programme with the US-based Schepens Eye Research Institute.

Richland Resources (LON:RLD  5.75p/£6.79m)
Richland Resources announced that it has entered into an exclusivity agreement with a major international trading company regarding Richland’s graphite project. This is located within the Company’s existing licence area in Tanzania, 1 km from where the Company has mined tanzanite since 2004. Historically, the licence area hosted a graphite mine that produced 6,776 tonnes during 1996, before running into financial trouble resulting in the closure of the operations in 1998. Under the terms, the Trading Company has a three month exclusivity period to conduct its studies of the graphite project followed by an additional three month right-of-first-refusal period in respect of any business relationship with Richland.

Shepherd Neame Limited (LON:SHEP.PL 840p/£96.24m)
The Kent-based brewer and pub operator announced results for the 26 weeks ended 29 December 2012.Turnover was up 2.6 per cent to £69.2m (2011: £67.4m) and it reported an operating profit level at £6.7m (2011: £6.7m).Statutory profit before tax was slightly down at £4.5m (2011: £4.8m) and a basic earnings per £1 share also slightly down at 27.6p (2011: 28.2p). The interim dividend increased to 5.00p per £1 Ordinary Share (2011: 4.90p). A strong performance across the pub and hotel estate has been seen in a challenging market, according to the Company. Jonathan Neame, Chief Executive, commented:”I am pleased to report a solid performance for the 26 weeks to 29 December 2012 with robust Christmas trading following the exceptional comparable period in 2011. Our performance reflects the underlying strength and resilience of our business as we have invested consistently in our brands and pubs over the long term.”

Silverdell (LON:SID 17.62p/£55.2m)
Silverdell, the specialist environmental support services group, has announced that following the positive start to the new financial year, management expects results for the year to September 2013 to be in line with its expectations. The Company has also confirmed its recommendation of a maiden dividend of 0.175p per share, to be paid on 22 March 2013 to shareholders on the register at the close of business on 13 March 2013. The order book remains strong and tendering activity remains very high with a number of key opportunities being negotiated. The Company has secured a number of long term framework contracts worth in aggregate up to £3m per annum. The Board has taken the decision to accept an offer of circa £1m as final settlement from Shaw Group on its 18 month final account negotiation on Pembroke Power Station, a contract secured in 2010. A non-recurring exceptional charge of around £2.5m will be recorded in the first half results for 2013. While this will not affect the Company’s underlying profit for 2013, the year-end net debt is now anticipated to be approximately £1m higher than previous expectations.

SQS (LON:SQS 273p/£76.15m)
Specialist in software quality services announced final results for the year ended 31 December 2012. Revenues were up by 11.1 per cent to EUR210.1m (FY 2011: EUR189.1m), whilst profit before tax was up by 26.6 per cent to EUR9.2 m (FY 2011: EUR7.3m). Improvements in cash collection during the year helped the cash position at EUR11.8m (2011:EUR6.3m). Managed Services contracts accounted for 34 per cent of total full year revenues compared to 22 per cent in the prior year, and the Company successfully renewed all Managed Services contracts due to end during the period. With a growing demand for managed services, SQS expects to extend its US presence and invest it its test centre infrastructure in India. A dividend of EUR0.07 per share (2011: EUR0.05) for the full year was announced. The Company believes first quarter 2013 performance has given it confidence to be able to report further progress going forward.

Stadium Group (LON:SDM 46p/£13.54m)
A leading electronic technologies group announced preliminary results for the year ended 31 December 2012, which saw revenues fall by 8.8 per cent to £40.99m (2011: £44.94m), and pre tax profits by 55 per cent to £1.77m (2011: £3.96m). During the period, the Company acquired IGT (which manufactures intelligent displays) for an initial cash consideration of £3.02m with a further sum of up to £0.75m dependent on year one performance, and completed the sale of a building it owned in Hong Kong (which previously housed the Company’s Asia operations, which has now been moved to mainland China) realising cash of £3.3m and a one off profit of £2.4m. Tough trading conditions last year have continued into the new year with the Company finding it challenging, though a good performance at the IGT business and rationalising operations has left Stadium anticipating a stronger second half, especially so considering the reduced cost base which will result from the planned closure of the Rugby facility.

Summit Corporation (LON:SUMM 4.3p/£15.23m)*
Summit, a drug discovery and development company, yesterday reported new data from its OGA (O-linked N-acetylglucosaminidase) inhibitor programme for the treatment of tauopathies, a group of neurodegenerative diseases that includes Alzheimer’s disease.  The OGA inhibitors were evaluated in an in vivo disease model, with results showing trends to a positive impact on motor impairment symptoms and improved survival rates following daily oral dosing.  These new data were presented at AD/PD™ 2013, the international conference on Alzheimer’s and Parkinson’s diseases held in Florence, Italy, 6-10 March. “Following the strategic refocusing of Summit to commit all resources into advancing our two clinical-stage programmes, the completion of this study represents the natural conclusion of our involvement in this programme… These encouraging results further highlight the promise of the approach and of our OGA inhibitors, and will add greater depth to the scientific data package as we talk with perspective collaborators about taking this programme further into development.” commented Glyn Edwards, Chief Executive Officer of Summit.

Surface Transforms (LON:SCE 10p/£3.84m)
Surface Transforms announced it has signed a non-exclusive agreement worth US$1.0m in revenue over the next 12 months, with a major global manufacturer of clutch and transmission systems. The agreement relates to the transfer of one of Surface Transforms’ in-house developed process technologies, a technology which is only one stage of ST’s multi-stage production process for carbon-ceramic brake disc components, and includes the sale of specialist equipment and an option to purchase further process technology and equipment worth approximately US$1.5m. A five year licence is included in the agreement, commencing in 2018, should they choose to manufacture and sell carbon ceramic components using Surface Transforms’ process technology. However, the Company has suffered a short-term adverse development in that Genii Capital – the 50 per cent owner of Mov’It – has decided to put their share of Mov’It up for sale and is using the German administration process to minimise costs and facilitate the sale. As previously announced on 3 March 2011, Surface Transforms has a significant distribution agreement with Mov’It. Whilst the Company’s assets at Mov’It’s are safe, the turmoil will reduce short term sales at Surface Transforms. The Board considers the net effect of both events will be neutral on profits and cash during the current financial year but positive on both during the year ending May 2014; turnover will be lower than market expectations for the current financial year but in line with expectations for the year ending May 2014.

Surgical Innovations Group (LON:SUN 6.05p/£24.48m)
The designer and manufacturer of creative solutions for minimally invasive surgery announced the appointment of US Paediatric and Thoracic surgeon Sean Barnett to its International Clinical Advisory Board (ICAB) with immediate effect. Sean Barnett, MD, MS, FAAP, FACS, is a US Paediatric and Thoracic surgeon specialising in core trauma and bariatric surgery. He works for one of the largest children’s hospital in the US, Cincinnati Children’s Hospital Medical Centre. The ICAB complements the established UK CAB and Sean will be the first paediatric surgeon to be joining either Board. SI are looking to penetrate the paediatric market this coming year with an advanced range of innovative 3mm laparoscopic devices, aimed at all areas of general surgery and especially minimally invasive surgery in children. Having Sean on the Board as a key US Opinion Leader will strengthen SI’s US position in this specific area of surgery. The ICAB will work with key UK and global clinicians to identify their clinical needs as well as being involved in all aspects of the product design cycle.

Tracsis (LON:TRCS 184p/£45.82m)
Tracsis announced that it has formed a new Advisory Board to assist with the on-going development of the Group’s Rail Consultancy practice.  From March 1st, Alan Wilson and Nigel Pennington will join Tracsis in an advisory capacity to work alongside Dr Robert Watson and existing senior management to lead this division going forwards. Alan Wilson was previously Managing Director of Wessex Trains and Midland Mainline and more recently has worked for a variety of transport owning Groups advising them on strategy and performance. Nigel Pennington has extensive operational experience of the rail industry, having worked in a number of senior management roles and latterly as head of train planning for Central Trains. Robert Watson founded RWA Rail which was acquired by Tracsis in 2008.  Since coming off the Tracsis Board in 2010, Robert has continued to work with Tracsis on a number of key client engagements and initiatives. These individuals bring with them a wealth of industry experience and contacts, and will add value to the Tracsis consultancy offering to facilitate further growth and service diversification.

*A corporate client of Hybridan LLP

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.

5th March 2013

This week: Flying results for CNR, EPO goes hyper and DDD extends US space

Last week saw the FTSE 100 close 50 points higher at 6,380 points and the AIM All Share fall 8 points to 740 points. News saw a shrinking of the manufacturing sector during February, with the Purchasing Managers Index falling to 47.9 from a downwardly revised 50.5 in January. UK Construction output also fell in February with the construction purchasing managers’ index falling to 46.8, compared with 48.7 in the previous two months. There was however some good news with UK retail sales growing at their fastest rate in more than three years in February, and the British Retail Consortium (BRC) saying that like-for-like retail sales were up 2.7 per cent on the previous year. The week ahead sees the Bank of England interest rate decision, as well as performance of the services purchasing managers’ index.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ACC Preliminary Results, AGTA Interims, AGL Product launch initiated, AVCT Business Update, CAP Research Grant, CNR La India Project update, CGNR Half-yearly results, DDD Yabazam extension, EPO hyperWALLET goes live, EKF Acquisition, JSG Final results, MAN Acquisition and purchase of assets, NETD Acquisition, NEW Drilling in Belize, STT Dyro Agreement, SKR Detailed Feasibility Study complete, THAL New Contracts, TRCS Interim results, TSTL Interim results, UBI US auto Win, VRP RPL554 activity in clinical trial

Access Intelligence (LON:ACC 3.25p/£7.53m)
Access Intelligence, a provider of SaaS solutions for the full life cycle management of a company’s governance, risk and compliance, announced its unaudited results for the year ended 30 November 2012. Turnover from continuing activities increased by 11 per cent to £8,053,000 (2011: £7,223,000) and recurring revenue was up 16 per cent to £5,562,000 (2011: £4,807,000) at 69 per cent of sales (2011:  66 per cent). A Loss after tax on continuing and discontinued activities was £114k (2011: profit £2,101,000) with total technology spend of £1,929k (2011:£639k). The Company is proposing a final dividend of 0.05p per share (2011: 0.2p). Michael Jackson, Executive Chairman, commented: “2012 has seen strategic investment in both the Company and its solutions. We have already started to see the early signs of return on this investment, with a significant increase in revenues contracted not yet invoiced and an increase in long term shareholder value with a growing recurring revenue base. Our strategy continues to evolve and the synergies and interoperability between our products continues to grow, with customers recognising considerable benefits from utilising our combined suite of brands.”

Agriterra (LON:AGTA 3.16p/£33.43m)
Agriterra, the pan-African agricultural company, has reported results for the six months ending November 2012. During this period, the Company strengthened its position as a debt free vertically integrated agricultural company with three established revenue streams. The margins at the beef business are expected to rise rapidly as the Company rolls out its distribution hub and retail units, maximising the potential of its newly established integrated beef operation. Furthermore, the cocoa operations in Sierra Leone has established a solid foundation for long term growth and record volumes are being achieved at its grain facilities in Mozambique. The US$28m received from the sale of the legacy oil asset in Ethiopia received in January this year has further boosted the cash balance of $3.2m at end-November 2012.

Angle (LON:AGL 61.5p/£27.82m)
The specialist medtech company announced that it has initiated the launch of its Parsortix non-invasive cancer diagnostic product for the research market. The Parsortix system can be configured either for the counting and identification of circulating tumour cells (CTCs) in the blood or for the capture and recovery (harvesting) of CTCs (for molecular analysis of the cells). ANGLE is in the process of placing machines on loan with a limited number of key users worldwide, who will contribute to the data sets Parsortix is developing to support regulatory submissions for CE marking and FDA approval.

Avacta (LON:AVCT 1.28p/£40.26m)
Global provider of innovative diagnostic tools, consumables and reagents aimed at reducing the cost of human and animal healthcare, has announced a business update for the six month period to 31 January 2013. In the Analytical Division, Optim 2, the re-engineered second generation instrument replacing Optim 1000 was completed during the period and has commenced shipment. The commercialisation of Optim 2 is underway through Avacta’s distributor network. Pall, Avacta’s long-standing partner in North America and South East Asia, is now also distributing in India, as announced in September 2012. Unit sales were slow during the period because of these transitions to Optim 2. The period also saw the first customer to purchase a second Optim unit and there are other similar second unit purchases in the pipeline. The Animal Health testing services business has performed ahead of expectations despite recessionary pressures affecting footfall into veterinary practices in the UK. The AX.1 “Sensipod” bench top analyser and the first test, a canine allergy pre-screen, were field tested by several veterinary practices during the months leading up to the end of 2012. The positive feedback from that testing, which yielded only minor user experience improvement suggestions, has been incorporated into the production version which are now being built for stock. Avacta expects to make first commercial sales during Spring 2013. In the Affimer Reagents division, the intellectual property around a new class of affinity reagents, named Affimers by Avacta, was acquired during January 2012. From this standing start Avacta has made substantial progress in the technical and operational plan to commercialise Affimers. Commercialisation of protein micro arrays is likely to commence in 2014.

Clean Air Power (LON:CAP 7.38p/£13.06m)
Clean Air Power the developer and global leader in dual-fuel engine management software for heavy duty vehicles, announced the start of a 2-year funded research project with Brunel University. The research project is aimed at developing the next generation of advanced Dual-Fuel combustion systems using natural gas and diesel. The project is to be carried out on a modern research heavy duty engine at Brunel University’s Centre for Advanced Powertrains and Fuels. This research project will deliver understanding of advanced diesel-gas combustion mechanisms and pioneer the next generation of Dual-Fuel technology that will meet the stringent demands of European and US emissions regulations whilst delivering a practical low-carbon pathway for heavy-duty transportation. The award of the project funding by the TSB is further evidence that the UK Government continues to identify and support low-carbon vehicle technology.

Condor Gold (LON:CNR 156p/£59.08m)
Condor Gold has announced the results of a Preliminary Economic Assessment (PEA) on its 100 per cent owned La India Project gold deposit in Nicaragua. The PEA was prepared by SRK Consulting (UK) Ltd. and points to an open pit and underground gold mine with an initial Life of Mine (LOM) of 13 years at an average gold grade of 3.8g/t gold for total production of 1.463m oz recovered gold. The PEA details average annual gold production of 152,000 oz gold for the first 8 years of the LOM at an average operating cost of US$575 per oz gold; production is split evenly between open pit and underground mining. The NPV of US$325m and IRR of 33 per cent are after a 3 per cent government royalty and 30 per cent corporation tax. The payback period for the capital equipment is three years. This news follows the announcement of results of a further 31 drill holes for 3,931m of the current phase of resource infill drilling at the La India Vein Set and the initial drill testing and further trenching of wall rock gold mineralisation on the America Vein Set. Drilling results continue to confirm continuity of gold mineralisation and grade of the current geological model. So far, the best drill intercept from La India is of 6.80m at 13.99g/t. Trench testing of Escondido Vein on the America Vein Set has returned best intercept of 6.8m at 3.59g/t gold.

Conroy Gold and Natural Resources (LON:CGNR 2.38p/£6.42m)*
The gold exploration and development company planning to develop a gold mine at Clontibret in Ireland last week announced its results for the six months ended 30 November 2012. Metallurgical tests by Gold Fields Ltd. are underway. Gold flotation recovery has been 90 per cent and eight per cent sulphur grade in concentrate. The results suggest an increased IRR and NPV. Geophysical results, combined with drilling results, suggest that the Clay Lake Prospect could host large gold deposit and a series of targets indicated at Slieve Glah by a gold-in-soil sampling programme.  Commenting, Chairman, Professor Richard Conroy said: “The commencement of the metallurgical tests by Gold Fields Ltd. is an important further step for our planned mine at Clontibret. I am also very pleased with the progress at our Clay Lake target in Co. Armagh which increasingly looks as though it could host a large gold deposit. The Board is also delighted by the discovery of a series of large targets at Slieve Glah.”

DDD (LON:DDD 25.75p /£34.59m)
DDD Group, the 3D solutions company, has extended Yabazam, its dedicated 3D Video-On-Demand subscription service, to be available on Samsung 3D Smart TVs in the US. The rollout of this service started last week. Yabazam launched its 3D subscription service for LG 3D TVs in early January, marking the first 3D movie service of its kind. The Yabazam service costs $9.99 per month and allows unlimited viewing of the original 3D programming available from Yabazam. The Yabazam 3D app is available through the television’s Smart Hub(TM) content portal and can be used on the full range of Samsung 3D Smart TVs. Yabazam features a wide variety of 3D content, including independently produced 3D movies, documentaries, music videos and animated features from producers around the world. DDD is aggressively growing the range of 3D programs available on Yabazam and is releasing new 3D titles on a weekly basis.

Earthport (LON:EPO 20.12p/£69.99m)
Earthport, the provider of cross-border payment services, has announced an agreement with hyperWALLET Systems Inc., a global payment provider and processor for corporate entities that make payments to employees and other beneficiaries. Integration with the Earthport service has been completed, and the corporate payments service is now live, enabling the efficient processing of high volumes of low value payments, via a transparent service.

EKF Diagnostics (LON:EKF 27.75p/£74.11m)
EKF Diagnostics, the point-of-care diagnostics business, has announced that it has established a new subsidiary, EKF Molecular Diagnostics Limited, to focus on molecular and companion diagnostics. EKF Molecular, in turn, has announced the acquisition of 360 Genomics Ltd, a business that develops diagnostic technologies for cancer gene detection, for an initial consideration of £1.6m to be satisfied through the issue of new EKF shares. 360 Genomics has been acquired from Oxitec Ltd., Dr Guoliang Fu, H20 Venture Partners, Bruce Savage and Benjamin Cobb. The initial consideration of £1.6m will be satisfied by the issue of 5.65m new ordinary shares at an issue price of 28.32 pence per ordinary share. Additional consideration payments up to a maximum of £8m in cash will become payable to the vendors as a percentage (ranging between 10 per cent and 20 per cent) of the portion of net aggregate revenues of 360 Genomics products which exceed £8m up until the year ended December 2019.

Johnson Service Group (LON:JSG 40.75p/£104.22m)
The dry cleaning group issued final results for the year to 31 December 2012 which saw revenue increase by 7.3 per cent to £251m (2011: £233.9m), whilst adjusted pre tax profit increased to £16.3 million (2011: £14.8 million). Textile rental revenues grew significantly, by 13.7 per cent to £134.4 million (2011: £118.2 million), whilst the dry cleaning business is undergoing a restructuring programme, with the 103 branches closed by mid-September and the back office relocated to the Textile Rental offices by early December. Strategic bolt-on acquisitions continue to form a core part of the growth strategy, and the Board remains confident that it will continue its progress in 2013.

Manroy (LON:MAN 55p/£10.47m)
AIM quoted UK defence contractor announced the acquisition of the trade and certain of the assets of Base and certain of the assets of RJL for a total aggregate cash consideration of £0.8m, financed through an increase of bank facilities which have been restructured to give the Group more working capital post-acquisition. The restructured facilities provide the Group with a £2.1m loan repayable over three years and an increase in the Group’s overdraft facility to £1.0m. Base was formed in 1972 and has grown into an established high precision engineering company located in Erith, Kent, where it will continue to operate after the acquisition. Base offers a one stop manufacturing solution and has a complete CNC milling and turning facility which is complemented by highly capable and sophisticated paint spraying centres. The extended capabilities that will be brought within the Manroy Group as a result of the acquisition include: Surface Grinding; Spray Painting; Alocrom; Anodising; Chroming and pre-treatments; as well as engraving and silk screening. For the year ended 30 September 2012, revenue for Base was £2.0m of which approximately 50 per cent related to sales made to Manroy. When Manroy commenced acquisition negotiations with Base, Base had already begun the process of acquiring the assets of RJL, located next to Base and providing a high proportion of sub-contract supply directly to Base. Having reviewed this proposal, the Directors considered that the acquisition of RJL would be beneficial to Base and, in turn, the enlarged Group. Both Base and RJL bring with them key employees who possess expertise in both large scale production engineering and experience to complement GPMG production. These two acquisitions will result in all manufacturing for the Group’s mounts, tow-bars, tripods and a majority of key GPMG components, being manufactured within the Group. As a result this will improve manufacturing controls and efficiencies which is expected by the Board lead to result in cost savings for the Group. In addition, Base and RJL bring additional revenue and customers from their own customers as original equipment manufacturers as well as other UK based customers within the defence sector.

NetDimensions (LON:NETD 43.5p/£11.08m)
NetDimensions, the provider of performance, knowledge and learning management systems, has acquired the assets, goodwill and business of eHealthcareIT for total consideration of US$3.5m (US$2.5m in cash and US$1m in stock). 50 per cent of the cash consideration is payable on completion with a further US$0.75m paid in four equal instalments commencing three months following completion and US$0.5m on an earn out basis. eHealthcareIT specialises in providing e-learning and compliance solutions to the U.S. healthcare market delivering training content that via the NetDimensions Talent Suite, and has been a leading partner and reseller of the NetDimensions Talent Suite platform during the last six years.

New World Oil & Gas (LON: NEW 4.12p/£14.89m)
New World Oil and Gas, an oil and gas exploration and development company focused on Belize and Denmark, has reported that the Rio Bravo #1 well, targeting the West Gallon Jug Crest prospect, commenced drilling on 1 March 2013, at its Blue Creek Project in Northwest Belize. The Company’s Competent Person, RPS Energy, estimates West Gallon Jug Crest to hold a P50 un-risked prospective resource of 113m barrels of oil and a P50 un-risked NPV of US$2.6bn on a 100 per cent working interest basis. The ThermaSource International rig #104 will drill to a total depth (TD) of 8,800ft, targeting the Upper Jurassic Margaret Creek Formation. Drilling results will be released once TD has been reached, which is expected to be by 1 May 2013.

Straight (LON:STT 29.5p/£3.51m)
Straight, the environmental products and services group, announced that further to its acquisition of Dyro Holdings in August 2010 for £2.9m, agreement has been reached with its vendors under the warranties and indemnities provided in the Sale and Purchase Agreement resulting in a revised purchase price of £2.42m. An initial cash payment for Dyro Holdings of £0.97m was made in 2010, with further payments due August 2011 and August 2012, subject to the vendors of Dyro Holdings closing a pension scheme. The payment schedule was deferred due to delays in this process. Under the revised agreement, a balance of £1.45m is to be paid in monthly installments over a period of five years commencing March 2013. The payments to be made will start at £250,000 per annum for the first two years of the agreement, increasing to £300,000 in years three and four with £350,000 due in the final year of the term. The revised terms of the agreement will not have an impact on the Company’s net assets.

Sunkar Resources (LON:SKR 10.62p/£36.24m)
Sunkar’s study on its Chilisai Phosphate Project, compiled by SNC-Lavalin International, Inc. has been completed. This is expected to form the foundation for a prospective project financing arrangement in due course. SNC-Lavalin believes that the Study is within a level of accuracy of +/-15 per cent in respect of capital expenditure and operating costs. An estimated Project Internal Rate of Return of 14.1 per cent after tax and 17.2 per cent before tax, on a 100 per cent equity financed basis. When discounted at 10 per cent, the Net Present Value of the Project is estimated to be US$715.2m (after tax) on an estimated EBITDA of US$278m per annum in 2017 and US$533m per annum by 2025. The total revenue over the life of the Project is estimated at approximately US$22.3bn. The estimated total construction cost for both phases of the Project (including initial plant and final plant) is approximately US$1.94bn.

Thalassa Holdings (LON:THAL 125p/£14.28m)
Thalassa confirmed that its subsidiary, WGP Energy Services, has entered into supplemental contracts with the Joint Stock Company Sevmorgeo (SMG), the Russian geological sea survey company. These contracts are to supply additional services and a vessel as part of seismic data acquisition surveys being conducted by SMG in Ecuador. The supplemental contracts will increase the revenue to the Company by in excess of US$500,000 to at least $5.6m in aggregate. The work has commenced and these surveys in Ecuador are scheduled to last until 15 June 2013. WGP has also received and executed a letter of intent with Statoil ASA, (STL.OL KR141.9/KR450,874.7m), to provide long-term seismic acquisition services for permanent reservoir monitoring of the Snorre and Grane oil fields in the Norwegian sector of the North Sea. The contract shall be for an initial fixed term until the end of 2017, with Statoil’s option to extend by two further terms of two years each. The total seismic acquisition contract value, excluding any extensions, is approximately US$32m and up to approximately US$65m if Statoil exercises the options to extend the contract by a further four years. The letter of intent also covers Statoil’s purchase of a bespoke dual portable modular source system (D-PMSSTM) which WGP shall maintain and operate throughout the duration of the acquisition contract. The value of this contract is approximately US$19.8m and delivery of the system is anticipated to occur by 1 October 2013.

Tracsis (LON:TRCS 162p/£40.33m)
Tracsis, a leading developer and consolidator of resource optimisation software, condition monitoring technology, and consultancy services to passenger transport industries, announced interim results for the six months to 31 January 2013. Revenue during the period increased by 29 per cent to £4.7m (H1 2012: £3.7m), whilst profit before tax increased by 50 per cent to £1.7m (H1 2012: £1.1m). Cash on the balance sheet was up by £0.9m to £8.5m (H1 2012: £6.0m, FY 2012 £7.6m). Cross selling to existing clients along with winning new helped both helped improve revenues, whilst product development during the period, which saw the rolling stock tool TRACS-RS launched in February, has been positive and resulted in two sales of this product to franchise bid teams. A sale for the new freight driver optimisation software ‘FreightTRACS’ was also achieved. Demand for the various consultancy and professional services offerings was however mixed, whilst the condition monitoring technology business continued to contribute to the Group’s revenue. The Directors recommend an interim dividend of 0.30p per share, a 50 per cent increase on the corresponding period last year.

Tristel (LON:TSTL 22.5p/£9m)
Tristel, the manufacturer of infection prevention, contamination controls and hygiene products, announced interim results for the six months to 31 December 2012, in which it saw a decline in revenues to £4.402m (2011: £5.061m) and an adjusted pre-tax loss of £0.642m (2011: £0.262m profit). A decline in revenues from the legacy endoscopy business was a feature of this. Global sales of the Wipes System did however grow by 19 per cent to £1.6m in the period, and the system has now been approved for sale in China. The Company has also engaged in a cost cutting programme, with both overheads and headcount being reduced, which it believes will lead to it being cash generative and return to profitable trading in the second half.

Ubisense Group (LON:UBI 194.5p/£42.63m)
Ubisense Group, a leader in the provision of location based smart technology, announced that a large, global automotive manufacturer has selected the Ubisense Smart Factory System for a yard management application at one of its facilities in the United States. The installation will use a more advanced version of the tri-mode tag introduced last year to extend the reach of the Ubisense Smart Factory System already used indoors in manufacturing plants around the world. The new system now allows for seamless operation both indoors and outdoors and provides complete visibility and control of vehicles, critical containers and SKUs as they move through the supply chain in a single software environment. This provides users with a comprehensive view across the entire facility and delivers valuable manufacturing intelligence when combined with other manufacturing execution data from MES.

Verona Pharma (LON:VRP 2.82p/£9.5m)
The biotechnology company focused on developing novel treatments for chronic respiratory diseases today announced the results of an exploratory, placebo-controlled, double-blind clinical trial designed to specifically evaluate the anti-inflammatory properties of RPL554 in healthy subjects challenged with an inhaled irritant. This dual PDE3/4 inhibitor is under development as a novel, first-in-class, inhaled treatment for COPD (chronic obstructive pulmonary disease) and asthma. This exploratory study showed a statistically significant reduction of total cells as well as in various types of inflammatory cells entering the airways in RPL554 treated, compared to placebo treated, subjects. The primary end point chosen for this exploratory trial was a reduction in the proportion of neutrophil cells, an inflammatory cell type recognised for its central role in COPD and severe asthma, to total inflammatory cells in the sputum and secondary endpoints included reductions in total inflammatory cell numbers. While there was a strong trend in favour of the primary endpoint, the study narrowly missed reaching statistical significance even though there was a highly significant reduction in the absolute number of neutrophils. Importantly, there were also statistically highly significant reductions in various types of inflammatory cells entering the airways in RPL554 treated subjects, providing positive evidence of the drug’s anti-inflammatory effects. Verona Pharma is currently developing RPL554, in a nebulised form, as a novel bronchodilator to treat patients with severe COPD, a significant unmet medical need. Previous clinical trials conducted by the Company have demonstrated that RPL554 is a potent bronchodilator with fast onset of action in both COPD and asthma patients. Near- to mid-term clinical development will focus on its bronchodilator properties in more severe patients. The Board believes that this focussed development will accelerate shareholder value growth. It is intended that the drug’s anti-inflammatory activity will be explored more fully in later studies to examine further the drug’s potential as a dual bronchodilator and anti-inflammatory treatment for patients with respiratory disease.

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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.