Small Cap Wrap: Month: May 2013

AIM Breakfast - Archive

21st May 2013

This week: E-sales bloom at BMY, energy flows through EGX and AIM slot for QXT.

The FTSE saw a gain of 100 points last week from 6,620 to 6,720, with the AIM All share seeing a small gain from 719 to 728 points. News has seen a slight pick-up in activity in the UK housing market with both mortgage lending and prices rising by 4 per cent in April and 2.7 per cent in the year to March respectively. A lower inflation rate was also announced of 2.4 per cent for April, down from 2.8 per cent in March. The week ahead sees UK public finances and retail sales data and MPC minutes being announced together with the IMF’s report on the UK.

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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.

AUE New Liberty Confirms Strong Financial Returns, BAB Study Indicates Substantial Gold Production, BMY Preliminary results, CMH Full year results, CFC Full year results, EDEN European approval, EGX Customer milestone, EKF AGM Statement, EPO New payments route, IKA Placing, MDM and Sedgman Merger Update, MSG Directorate Change, NMG Positive Results from Assaying of Historical Core, PGH New contract, QXT IPO, SOLG Expedite Drilling and Appraisal of Cascabel, La Encrucijada, SRB Q1 Financial Results, TGL Q1 Results, TRS Interim management statement, VEC Final Results, VENN new division InnoVenn, VRP Presentations at ATS, ZYT Interim results

Aureus Mining (LON:AUE 39p/£86.34m)
Aureus Mining announced  its NI 43-101 compliant optimised Definitive Feasibility Study (DFS) for its 100 per cent owned New Liberty Gold Project in Liberia following the completion of the optimisation work which focused on the plant and mine designs and the location of site infrastructure. The DFS outlines an economically robust gold project based on a flat gold price of US$1,400/oz, totaling revenue of US$1.2bin and pre-tax cash flow of US$353m. The DFS shows average annual gold production of 119,000 oz over the first six years at an average grade of 3.6 g/t with total gold production of 859,000 oz over the eight year open pit mine. Life of Mine operating cash cost will average US$ 668 / oz using contract mining, a reduction of 2.5 per cent, while initial capital cost estimate of US$136m (excluding contingency), represents a reduction of 2.9 per cent. The DFS has increased the average production profile for the first six years. New Liberty will be Liberia’s first commercial gold mine and Aureus’ first mine in its highly prospective 546 km (2) total licence area. The cash position as at 31 March 2013 is US$68.9m.

Bloomsbury Publishing (LON:BMY 110.25p/£81.78m)
Bloomsbury reported its preliminary results to 28th February 2013 this morning, that continuing profit before tax was up 3 per cent to £12.5m (2012: £12.1m) whilst continuing turnover was up 1 per cent to £98.5m (2012: £97.4m). The total dividend increased by 5.8 per cent to 5.50 pence per share (2012: 5.20 pence per share) and net cash increased to £14.6m (2012: £12.6m). Bloomsbury has a progressive dividend policy, and the current dividend yield is 4.8 per cent. Bloomsbury saw huge growth in e-book sales, increasing by 61 per cent to £9.1m (2012: £5.7m) and now representing 9 per cent of Group sales by value. The Academic & Professional division is delivering to the top and bottom line. The five year plan is to be number one in humanities and social science publishing in Europe and number one globally in Applied Visual Arts. It is expected that in five years this division will provide 50 per cent of the growth of the Group and 50 per cent will be digital. It will do this by increasing the amount sold digitally direct to academic institutions, increasing the numbers of professional customers buying digitally rather than print, and also by focusing on bolt on acquisitions and by looking for new revenue streams within the backlist IP. The Adult division has seen “Song of Achilles” win Orange Prize for Fiction 2012, and Will Self with “Umbrella” has been awarded second prize for the Man Booker. The Indian business is still feeling its way. The five year plan is to be the number one publisher in cookery, sport and natural history and top ten in quality fiction, and first choice for quality authors. It is expected that in five years 50 per cent will be digital, 50 per cent will be new and 50 per cent backlist and 50 per cent general and 50 per cent specialist. It aims to do this by focusing on global rights acquisition and marketing, and digital innovation in specialist niches, as well as expanding into India, Latin America and Australia and increasing the breadth of digital. The outlook is strong with recent titles such as Khaled Hosseini “And the Mountains Echoed” released this week, we believe and “The Signature of all Things” by Elizabeth Gilbert due to be published in October this year. In the Children’s and Educational division, E-first imprint, Bloomsbury Spark has been set up as an exciting division to publish young adult writers, using e-first initially and then moving to print later if successful. In five years time, the plan in this division is to have 25 per cent digital, and 50 per cent illustrated and 50 per cent fiction, and be well known for author care and independence in spirit and innovation, with Activity Books a leading profit centre. It wants to focus, in this division, on significant growth in schools and sell direct to schools. It will achieve this five year plan it hopes with digital innovation in colour ebooks, apps, e-first imprints and online digital products and development of Activity Books, launched in October 2012. The focus will continue to be on the brand management of Harry Potter, with the upcoming illustrated versions of each book to be launched. In the Information Division, the five year plan is for global reach. In terms of future growth, Bloomsbury is looking to expand into China and Latin America. Bloomsbury’s vision was two years ago, a wholly integrated publishing company of general and academic books and digital information with a single management structure in the UK, US, India and Australia; successfully delivered according to the numbers.

Bullabulling Gold (LON:BGL 3.125p/£10.68m)
Bullabulling Gold Ltd., a gold miner focused on the Bullabulling Gold Project in Western Australia, announced that it has completed initial pit optimisation studies, indicating substantial gold production and mine life under a range of gold price scenarios. The pit optimisations are part of a broader mining optimisation process that is being carried out during the initial phase of the Bullabulling Gold Project definitive feasibility study. Production levels and mine life for the $1,350 per ounce scenario most closely match the Bullabulling prefeasibility study (PFS) results; however indicated cash costs at $850 to $950 per ounce are in the order of 20 percent below PFS estimates. It is expected that in common with the PFS, cash costs in the early years of the project will be substantially lower than the life of mine average. Production scheduling and financial modelling will follow, with release of a re-optimised economic assessment targeted for mid-year.

Chamberlin (LON:CMH 109p/£8.67m)
Chamberlin, the specialist foundry and engineering group, has reported that revenues for the year ending March 2013 were down 7 per cent to £42.3m, with a slight softening of demand in the first half followed by a further slowdown in the second half of the financial year. Underlying operating profit reduced to £1.3m (2012: £1.7m), with tight cost control limiting the impact of the revenue reduction. Cash generation was only slightly down at £2.3m and was again significantly above underlying operating profit, equating to 177 per cent of operating profit. This enabled net borrowing to fall by 37 per cent to £0.98m. The Board has recommended the payment of a final dividend of 2p per share, which increases the total dividend for the year to 3.25p (2012: 3.0p). The company has also announced that after seven years as CEO Tim Hair has given notice that he will be stepping down from the Board and the Company next May 2014 or sooner if an appropriate replacement is found before that time.

China Food Company (LON:CFC 13.75p/£9.82m)
China Food Company, a Chinese manufacturer of cooking and dipping sauces, has reported that in the year ending December 2012 revenues increased by 19 per cent to £20.1m, with a 34 per cent increase in soya sauce in H2 2012. Losses before tax increased to £4.6m (2011: £1.9m) due to increased marketing spend of £6.8m. It anticipated that overall marketing spend will diminish both as a proportion of revenues and absolutely, which as a consequence, is expected to increase net margin. The Company has a strong asset backing with net assets of £31.7m and net asset per share of 44p. The completion of a new state-of-the-art animal feed factory should facilitate the eventual sale of this non-core business, and further strengthen the balance sheet.

Earthport (LON:EPO 19.75p/£69.18m)
Earthport, the cross-border payments service provider, has launched its first payments route into North Africa with a fully automated service into Morocco to meet the growing demand in the region. Morocco is seen as one of the top remittance countries on the African continent and is the second largest remittance country in North Africa with an estimated $6.4bn worth of payments received in 2010. The payment route will enable Earthport’s clients to quickly launch new payments services into the country and deliver faster, more cost efficient and more transparent remittance transfers. The launch into Africa follows the Company’s expansion into India in April, and earlier this month the Company announced an agreement with Viamericas, a leading provider of remittance payments for Latin America, to support its strategic growth outside the Americas.

Eden Research (LON:EDEN 13.62p/£16.80m)
The AIM listed agrochemical and encapsulation development company announced that it has received approval from the European Commission for the three active substances that are used in the Company’s lead product, 3AEY, for use in plant protection products. This will allow the actives to be used with Eden’s encapsulation technology in any combination to create a range of agrochemical products for a variety of applications and it is also thought that the approval will trigger decisions by other regulators outside of the EU where sales are expected in a much shorter timeframe. 3AEY, is a naturally derived Botryticide (an agrochemical against a widespread fungal disease that causes grey mould on most fruits and vegetables) with a market size of around $300m per annum. Clive Newitt, Managing Director of Eden commented: “… Now that we have passed this key milestone, we will be able to concentrate our efforts on getting products in to the market and maximising returns on the investment that we have made to date. I believe that this will not only be possible through the sale of agrochemicals using our actives, for which we will receive royalties, but also through sharing with third parties the wealth of data that we have generated for the approvals. Also, using our encapsulation technologies and know-how, we will now be able to expedite development and commercialisation in non-agrochemical sectors, such as human and animal health, where we know there is demand for effective, environmentally friendly products backed up by sound intellectual property protection, such as ours.”

EKF Diagnostics (LON:EKF 29p/£79.09m)
AIM listed point-of-care diagnostics business held its Annual General Meeting last week. At the meeting David Evans, Executive Chairman of EKF, provided shareholders with the following  update: “Trading in the period to date continues to be in line with expectations and I anticipate seeing further advancement across all areas of our business as we continue to execute against an ambitious growth plan for 2013. In March 2013 we established our Molecular Diagnostics division to offer innovative products with the potential to change current DNA extraction and detection practices, enabling us to address the fast growing companion diagnostics market. Our Pointman™ technology provides a reliable and highly sensitive determination of the presence or absence of a point mutation, a random mutation that occurs at one point in the DNA sequence. We were recently granted patents in both Europe and Japan for this technology and we were delighted to announce earlier this week the launch of our first PointMan™ DNA enrichment products for the Research Use Only market ahead of plan. We remain confident in delivering growth for 2013, during a year that will see a full year of Quo-Lab sales contribution as well as HemoPoint H2 sales through Alere in North America.”

Energetix Group (LON:EGX 14.25p/£18.88m)
Energetix Group, the developer and provider of energy efficient products and retail energy services, has announced that its domestic energy business, Flow Energy, has registered over 10,000 energy customer accounts. This milestone has been reached in just six weeks, since Flow Energy launched to the home energy market on 2 April 2013. The Company believes that Flow Energy provides very competitive prices alongside high levels of service; its Thames tariff is currently the cheapest Fixed Rate home energy tariff on the market. The extensive customer database is generating significant revenue for the Company for the first time. It is also providing the opportunity to offer the key element of Flow’s strategy, the Flow microCHP boiler, to its existing customers to allow marketing costs for the boiler to be reduced and take up increased.

Ilika (LON:IKA 28.5p/£13.06m)
Ilika, the advanced cleantech materials discovery company, has announced that 2.375m new ordinary shares have been placed at a price of 30p per share. The placing will raise net funds of £709,000 for the Company at a 15 per cent premium to the closing mid-market price on 16 May 2013. Following this placing, net cash will be in excess of £2.5m, which provides sufficient funding for the current financial year ending April 2014 and beyond.

MDM Engineering Group (LON:MDM 143.5p/£53.47m)
The minerals process and project management company focused on the mining industry noted the announcement made by Sedgman Limited and provided the following update on its proposed merger with Sedgman which was originally announced on 28 November 2012, and further to the release made on 13 March 2013. As stated in the announcement on 28 November 2012, the Merger remained subject to a number of conditions precedent. Recent volatility in commodity prices, notably the gold price, has led to some of MDM’s prospective clients reassessing the timing of commencement of certain large scale expansion projects. The delay in a couple of these projects will result in MDM not being able to satisfy the condition precedent contained in the Merger Implementation Agreement agreed with Sedgman as announced on 28 November 2012 relating to the Company’s order book.  As certain condition precedents have not been waived, the parties are currently in the late stages of negotiating revised Merger terms. MDM and Sedgman still believe that there are strong strategic merits to the Merger, and an amended and re-stated MIA to reflect the revised terms is expected to be finalised shortly. Despite the delay experienced in the commencement of the projects noted above, MDM continues to field a high level of enquiries regarding project feasibility and construction work and is confident of securing additional execution projects during the course of the 2014 financial year, to supplement the Company’s existing record order book.

Milestone Group (LON:MSG 0.48p/£1.95m)*
Milestone, the AIM quoted provider of digital media and technology solutions last week announced the appointment of Mr. Kevin Everett as a Non-Executive Director of the Company with immediate effect. Kevin is currently Treasurer and Chairman of the Board of the Sir John Cass Foundation. During his 23 years on the Board, he has led the re-structuring of the Foundation, increasing their assets from £16m to £120m. Kevin has vast experience in connecting foundations with the corporate sector, a model now used by industry to bring education and employers closer together. Kevin has previously served as a director on a number of Boards, both commercial and not for profit. He is also a Chairman of the Valuation Tribunal for England.

Noricum Gold (LON:NMG 0.52p/£3.96m)
Noricum Gold Limited, the Austrian focused gold exploration and development Company, has announced positive results from the assaying of historical un-sampled core from the previously producing mine at the Rotgulden Gold and Precious Metals Project. Assaying of historical core underpins the prospectivity of the Rotgulden project. Drilling confirmed that the sulphide mineralisation persists for 60m along strike and down dip (the capacity of the rig), and remains open both along strike and down dip. These results will assist in targeting resource drilling at Rotgulden which is fully funded. Noricum Gold Managing Director Greg Kuenzel said: “These high grade results highlight the potential of Rotgulden and further confirm the prospectivity of this historic gold mine as we move towards resource drilling. The Company continues to make good progress across the entire licence area and we remain very comfortable with the way the project is developing.”

Personal Group (LON:PGH 395p/£118.76m)
Personal Group, the provider of employee benefits, employee related insurance products and financial services in the UK announced that it has won a tender to provide employee benefits to Network Rail’s 35,000 employees across the UK. The programme will launch in Q3 2013 and will offer all employees a bespoke suite of benefits. The programme will encompass Personal Group’s iPad application which was launched recently as part of the Company’s plan to invest in headcount and technology this year (spending around £900,000 in total capital expenditure for 2013) as part of the wider plan to double the market cap over the next two to three years.

Quixant (LON:QXT 49.5p / £31.99m)
In what is a year for very few IPO’s, at still only a few more than a dozen this year on AIM, Quixant this morning listed successfully and started well. Quixant is a leading provider of specialised computing platforms for gaming and slot machine applications. The Company raised approximately £4.55m in aggregate with a number of institutional investors and High Net Worth Individuals. Quixant was founded in 2005 and is head quartered outside of Cambridge in the UK. The Company has a strong financial track record, and the Directors believe that the current sales pipeline is supportive of continued substantial growth in 2013 and 2014. The share was placed at 46p and finished the day at 49.5 pence as a mid price, having traded up to 51 pence during the day.

Serabi Gold (LON:SRB 7p/£25.29m)
Serabi Gold, the Brazilian focused gold exploration and development Company, has published its unaudited financial results for the three month period ending 31 March 2013 and at the same time has also published its Management’s Discussion and Analysis for the same period. On 17 January 2013 the Company completed the placement of 270m new ordinary shares to raise in aggregate £16.2m to finance the development and start-up of underground mining operations at its Palito Mine. Mine dewatering at Palito was completed in January 2013, the new mine management team and contract mining personnel are now in place and two main ventilation raises to surface have been started.The loss from operations decreased by US$320,001 from US$1,384,267 for the three months ended 31 March 2012 to US$1,064,266 for the 3 month period ended 31 March 2013; a reduction of 23 per cent primarily arising from a change in the manner in which costs associated with maintenance activities of the plant are treated for accounting purposes and reduced depreciation costs. Administration costs have shown an overall increase from US$810,786 for the three month period ended 31 March 2012 to US$908,753 for the 3 month period to 31 March 2013.  The expense for the three months to 31 March 2012 included a charge in respect of labour claims amounting to US$182,531 and there has no similar expense recorded for the period to 31 March 2013. The Company had a working capital position of US$19,177,385, at 31 March 2013 compared to US$(2,760,102) at 31 December 2012.  The working capital position at 31 December 2012 was inclusive of a US$4.5m short term loan received from a major shareholder which was repaid in January 2013, following the successful completion of a share placement on 17 January 2013.The Company also announced a proposed acquisition of Kenai Resources Limited in May 2013, where shareholders of Kenai will receive 0.85 of one new ordinary share of 5 pence par value of Serabi in exchange for each Kenai share held, thus Kenai shareholders will own approximately 20.8 per cent of Serabi’s enlarged issued share capital. The acquisition will bring significant benefits to Serabi as Kenai’s wholly owned subsidiary Gold Aura do Brasil Mineração Ltda owns the high-grade Sao Chico gold deposit, some 23 kilometres from Serabi’s Palito gold mine.  Sao Chico hosts a NI 43-101 compliant combined Measured and Indicated Mineral Resource of 25,275 ounces of gold at 29.77 grammes per tonne and an Inferred Mineral Resource of 71,385 ounces gold at 26.03 g/t. Serabi’s nearby Palito gold mine is set to recommence gold production by the end of 2013.

SolGold (LON:SOLG 3.32p/£18.09m)
SolGold (formerly Solomon Gold PLC), the gold and mineral exploration company operating in the Solomon Islands and Australia, announced that it will expedite drilling and appraisal of its Cascabel and La Encrucijada Projects, commencing with its 2,500m program at the high grade Alpala Project at Cascabel. The drill program is awaiting final drill permits, a process which is well advanced. SolGold can acquire an 85 per cent interest in Cascabel and the La Encrucijada Projects. The Government of Ecuador has presented a new Mining Bill to the Ecuadoran Congress. The Bill is expected to be passed quickly due to strong support from President Rafael Correa’s ruling Alianza Pais Party and to smooth exploration and mine development processes in Ecuador. The Bill contains a number of concessions which SolGold believes will encourage mineral exploration and mine development in Ecuador. Importantly the Bill contains ceilings on mining royalties and promotes for capital payback prior to the application of windfall taxes.

Tarsus (LON:TRS 228p/£218.56m)
The international business-to-business media group published an interim management statement for the period from 1 January 2013 to 16 May 2013, where it stated that whilst revenues are usually second half weighted, performance for this period has seen revenues up 9 per cent on a like for like basis, in line with the Board’s expectations. Further, forward bookings for the year to 31 December 2013 are 11 per cent ahead of last year. The emerging markets has seen good revenue growth and integration of recent acquisitions, and the acquisition at the beginning of the year of a majority stake in Indonesian exhibitions group PT Infrastructure Asia has provided Tarsus with what it believes to be an important hub in the fast growing Indonesian exhibition market. Good growth was also seen in the US market with the Medical division, whilst the Group’s French division has performed in line with expectations.

Touchstone Gold (LON:TGL 3.62p/£7.30m)
Touchstone Gold, a gold exploration company with a highly-prospective gold project in the Segovia District of Colombia, reported its financial results for the three months ended March 31, 2013. For the three months ended March 31, 2013 the Company recorded a net loss of $1,350,496 or $0.01 per share compared with a loss of $3,187,473 or $0.03 per share for the three months ended March 31, 2012. As of March 31, 2013, the Company had cash and cash equivalents of $2,440,490. During the first quarter of 2013, the Company commenced its Stage 4 drilling program and identified a new target zone. The program will focus on three zones; the 1141 Zone, Tagual Zone and the Bern zone. Additionally, the Company achieved positive results from metallurgical tests conducted on several samples, Pepas #1 and Pepas #2. Initial results indicated recoveries from 87.9 per cent to 95 per cent gold in floatation concentrate with Cyanide leaching providing recoveries ranging from 40.5 per cent to 90.7 per cent. David Wiley, CEO of Touchstone Gold Limited said: “We remain sensitive to the current market environment and are working diligently to reduce our costs as we continue to advance our project forward.”

Vectura Group (LON:VEC 90p/£300.91m)
Vectura published its final results this morning that revenues were slightly ahead of expectations at £30.5m (2011/12: £33m). The EBITDA loss improved to £3.4m (2011/12: £4.2m). The loss before tax decreased by 21 per cent to £10.4m (2011/12: £13.2m). The balance sheet strength was maintained with cash and cash equivalents of £70.1m (£75.5m at 31 March 2012).  Dr Chris Blackwell, Chief Executive of Vectura said: “As Novartis continues its roll out of Seebri(R) Breezhaler(R), we will build on our royalty income and should also benefit from additional near-term development milestones from products in our pipeline. These additional income streams will provide a platform from which we can generate the next phase of Vectura’s growth. To achieve this, we will actively seek and evaluate suitable late-stage development and commercial opportunities…”

Venn Life Sciences (LON:VENN 30.5p/£6.13m)
A growing Clinical Research Organisation (CRO) providing clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients, last week announced the launch of InnoVenn, Venn’s new innovation division set up to focus on co-development opportunities, particularly in the medical device arena. The goal of InnoVenn is to accelerate the commercialisation of life science products in the later stages of development. As stated in the Admission Document, the Directors believe that through co-development initiatives there is the opportunity for Venn to share in future revenue streams associated with IP development and sale or out-licensing. The pursuit of co-development opportunities differentiates Venn’s services from the classic CRO model and utilises the wide capabilities of the Venn Board and management team. InnoVenn’s first co-development initiative will be a joint venture with two Irish biomedical companies, Cellulac Limited and Biopharmed West Limited, developing the next generation of biodegradable human implants, to replace the widespread use of titanium in orthopaedic surgery. InnoVenn will provide clinical trial management services during the product development stage and will collate the clinical data that is essential for successful regulatory approval as well as retaining a stake in the Joint Venture and the IP owned by it.

Verona Pharma (LON:VRP 2.48p/£8.32m)
Verona Pharma, the drug development company focused on “first-in-class” medicines to treat respiratory diseases, has reported that three posters will be presented at the annual American Thoracic Society (ATS) International Conference, Philadelphia, USA held from 17 to 22 May 2013. The posters detail results from successfully completed phase IIa trials on Verona Pharma’s lead drug RPL554 delivered as a nebulised aerosol. These studies highlight the tolerability, safety and significant bronchodilator activity of this novel PDE3/4 inhibitor in patients with mild to moderate asthma or mild to moderate chronic obstructive pulmonary disease (COPD). Results from a supportive preclinical study demonstrating the dilatory action of the drug on isolated human airways and its synergistic action with muscarinic receptor antagonists will also be presented. Verona Pharma is initially progressing further development of RPL554, in nebulised form, as a treatment for severe COPD, a significant unmet medical.

Zytronic (LON:ZYT 183.5p/£27.42m)
AIM listed specialist manufacturer of international award-winning touch sensor products announced interim results for the six months to 31 March 2013. Revenue for the Company decreased by 20 per cent to £8.5m (2012:£10.6m) whilst profit before tax fell by 64 per cent to £0.8m (2012: £2.1m). Revenue performance was due to the absence of one-off orders and project delays, as indicated during the firms AGM in February, whilst erratic ordering patterns and reduced volumes and product mix adversely impacted efficiencies, margins and therefore profit before tax. Cash on the balance sheet stood at £4.6m (2012: £4.2m). A number of previously expected major projects did not come through during the period, though the Company considers these projects are still live prospects, and together with the multi touch mutual projected capacitive technology (MPCT) gives the Company what it feels are a number of interesting projects ahead. The interim dividend was increased by 6 per cent to 2.75p.

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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.

14th May 2013

This week: Illuminating update from PSL, good sounds from Cello and EPO to grow into new territories

The FTSE continued its upward run unabashedly last week gaining 111 points to close at 6,625 (and the AIM All Share gained 4 points to close the week at 718) with little macro news to deter investors worldwide. Asian markets, led by the Nikkei, in particular continues to be buoyed by Abenomics (reference to the new economic policy being rolled out by the new Japanese Prime Minister, Shinzo Abe). The momentum in the UK is being led by defensive sectors, especially telecoms, pharmaceuticals and personal goods, while natural resources remain out of favour. The UK calendar this week is again dominated by updates from large cap stocks. The US economic calendar is busier this week, led by Initial Jobless Claims, Housing Starts/Permits and University of Michigan Confidence, and could determine how markets end this week.

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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.

ACTA Commercial update, AGL update on Parsortix, BGL Resource upgrade, BXP Full year results, BZT General Meeting, CGH Strategy update, CGNR Further gold targets identified, CLL AGM Statement, CML Trading update, EPO Agreement with Viamericas, ERU Temporary Suspension, FDBK Disposal/Acquisition, FRX Issue of Shares, HYD Board Changes, IAP Final Results, INS Acquisition, JNY Share Consolidation, LID LiDCOrapid(v2) new installation, LRM Full year results, PHD Launch of New eProcurement App, PSL Awarded grant, TEG Composting milestone, XEN trials update, ZYT Trading update

Acta (LON:ACTA 6.88p/£9.65m)
Acta S.p.A., the clean energy products company, has reported that following an exhibition at the Hannover Messe in April 2013, the Company has received repeat orders from key clients, first orders from new clients, and developed a strong pipeline of new sales proposals. In addition a number of new commercial engagement opportunities have developed that are expected to accelerate sales and product adoption over the summer. At Hannover Messe, Acta exhibited its low cost hydrogen electrolyser and stack range. The Company also exhibited its new end-user product, the Acta Power, which integrates Acta’s EL1000 electrolyser with a fuel cell system from FutureE Fuel Cell Solutions, based on a Ballard stack. Following the exhibition Acta has received two repeat orders from an existing customer for EL500R electrolysers, a repeat order for a smaller electrolyser from Asia Pacific Fuel Cell Technologies, and five confirmed orders for electrolysers and other products from new customers.

Angle (LON:AGL 54p/£24.43m)
The specialist medtech company announced that the Company has further extended the operational capability of its Parsortix non-invasive cancer diagnostic product by automating its cell harvesting function. The Parsortix system now has the potential to provide users with cancer cells for analysis from a simple blood test – a form of “liquid biopsy”. This opens the way for the cells to be analysed to identify the specific mutations of the individual patient’s cancer using a wide range of genetic and molecular techniques. This then offers the prospect of personalised medicine with drugs and other treatment selected specifically to address the individual patient’s own cancer with better patient outcomes and lower costs of treatment.

Beximco Pharmaceuticals (LON:BXP 19.14p/£58.31m)
Beximco this morning announced its full year results. Profit before tax increased 13.83 per cent to BDT 1,909.8m (£16.0m) (2011: BDT: 1,677.8m (2011: £12.6m)). Beximco is the first Bangladeshi company to launch Salbutamol HFA Inhaler in Singapore with its own brand Azmaso(R). During the period, Beximco launched pMDI products for the first time in Bangladesh with integrated dose counter device (two combination inhaler products are currently marketed with a dose counter actuator device) and commenced inhaler exports to South Africa. It has during the last year registered 36 new products in 12 countries and commenced export to 7 new countries (Mauritius, Ethiopia, Columbia, Azerbaijan, Liberia, Thailand and Suriname). During the period, Beximco received GMP (Good Manufacturing Practices) accreditation from the Austrian regulatory authority (for the European Union) for a new Metered Dose Inhalers (MDI) facility; GMP clearance from MCC, South Africa for MDI facility.

Bezant Resources (LON:BZT 28p/£23.22m)
Bezant the gold and copper exploration and development company operating in the Philippines and Argentina, announced that the resolutions proposed at the General Meeting were all duly approved by shareholders. Accordingly, the proposed Capital Reduction will take effect if confirmed by the High Court and upon the Order of the High Court being lodged with, and registered by, the Registrar of Companies, which is expected to take place on 23 May 2013. It is expected that a Distribution of 8 pence per Share in respect of the Capital Reduction will be made to Shareholders on or around 30 May 2013 in respect of each Share held on the Record Date: 6.00 p.m. on 22 May 2013.

Bullabulling Gold (LON:BGL 2.62p/£7.94m)
Bullabulling Gold reports that the Mineral Resource estimate for the Bullabulling Gold Project has been updated to incorporate results from the recent drilling program at the Edwards and Gryphon prospects. Total project resources have increased by 3.9m tonnes at 1.68g/t to 113.2m tonnes at 1.02g/t. Contained gold has increased by 210,500 ounces to 3.72m ounces. The grade of the extended resource exceeded expectations and led to a two percent increase in the global resource grade. The additional high grade material will be scheduled for early processing and is expected to contribute to improved project economics.

Cello Group (LON:CLL 50p/£41.18m)
Cello this morning is making a statement at its AGM which says that the Group has seen robust trading so far this year, reflecting the continued good performance of Cello Health and the continued strong recovery of Cello Consumer. Cello Health has had a good start to the year, reflecting the strong pipeline of work secured at the end of 2012 and continued healthy new business activity in 2013. The US continues to see strong activity levels and Cello Health plans to open a new office in Chicago shortly to maintain this positive momentum. In total, these wins are worth over £1.0m of gross profit. A number of the investment initiatives commenced in 2012 have therefore already begun to come into profit. Mash Healthcare, acquired in January 2013, has been trading very well for instance.

Chaarat Gold (LON:CGH 18.12p/£45.40m)
Chaarat, the gold exploration and development company with assets in the Kyrgyz Republic, has updated the market on its strategy for unlocking the value of the Chaarat deposit. Following consultations with stakeholders, including strategic investors and shareholders, the Board has decided that, given prevailing market conditions, preparing a definitive feasibility study (DFS), making progress on obtaining the related permits, progressing infrastructure and continuing discussions with strategic partners are now the best ways to add value to the Chaarat Gold Project. The Board hopes that the completion of a robust DFS will substantiate the value and potential of the Chaarat deposit and provide it with a stronger negotiating position with potential strategic investors, who have already approached Chaarat, as well as increasing the options available for adding value to benefit all shareholders. A programme of approximately 15,000 metres of infill drilling will be designed and executed during the 2013 season, with data collection for the DFS taking place at the same time, both of which are expected to be completed by the end of this year. The Board does not need to raise funds to complete a DFS as cash reserves of approximately $24m are available to fund the revised strategy.

CML Microsystems (LON:CML 422.5p/£67.01m)
The designer and manufacturer of semiconductors provided a brief trading update in which it stated that unaudited figures indicate revenues for the year will be ahead of market guidance at just over £25m. Profit before tax is expected to be circa £5m with net cash of £8.9m at 31 March 2013 on the balance sheet, both of which are ahead of market expectations. This follows interim results late last year for the six months to 30 September 2012, in which revenues increased by 3.3 per cent to £12.70m (2011 H1: £12.29m), and profit before tax was up 19.5 per cent to £2.41m (2011 H1: £2.02m). Growth back then was seen in the Americas and Far East, though Europe presented difficult conditions. Preliminary results for the full year will be announced on Tuesday, 11 June 2013.

Conroy Gold and Natural Resources (LON:CGNR 2.2p/£6.41m)*
Conroy announced that a series of further gold targets have been identified along the gold trend.  This follows an independent review of the airborne geophysics data in the area by BRG (Geotechnics) Limited. The Company’s detailed multi component airborne geophysical data includes magnetics, electromagnetics, radiometrics and laser altimetry. The new targets identified by the independent review have similar airborne geophysical characteristics to the known gold occurrences at Clay Lake, Clontibret and Glenish within the Company’s licence area. The target zones have been identified at confluence areas of various linear features and splays revealed by the airborne geophysics. These are typical features in areas associated with gold mineralisation. Two of the target areas also coincide with regional soil geochemical anomalies which the Company has already identified.

Earthport (LON:EPO 20.75p/£72.69m)
Earthport, the cross-border payments service provider, has secured an agreement with Viamericas, a leading provider of remittance payments for Latin America, to support its strategic growth outside the Americas. Under the agreement, Viamericas will leverage Earthport’s global cross-border payment capabilities to service new routes outside Latin America and the Caribbean. This agreement will enable Viamericas to expand its customer base internationally and provide more efficient, predictable and cost-effective direct-to-bank remittance transfers. Viamericas was ranked by the Inter-American Dialogue as the top remittance provider for the region in its 2012 Remittance Scorecard report. With remittance flows to the developing world expected to grow by 7.9 per cent this year and reach a 10.7 per cent increase by 2015, Viamericas needed a partner that could enable it to capture a bigger share of this growing market. With local clearing capabilities in more than 50 countries worldwide, Earthport is uniquely placed to support Viamericas’ expansion into new territories.

Eruma (LON:ERU [last price]1.65p/£420k)
Eruma, the specialist provider of counter terrorism, intruder prevention and intelligent lighting solutions announced that HMRC has issued a winding up petition against the Company, the hearing of which took place Monday 13 May. The outcome of the hearing is that the petition has been adjourned until 1 July 2013 in order to allow the Company time to find an alternative solution. The Board is actively reviewing a number of alternative options and will make a further announcement in due course.

Feedback (LON:FDBK 0.38p/£490k)
Feedback announced that it has entered into a conditional sale and purchase agreement, to dispose of its wholly owned subsidiary Feedback Data plc to Belgravium Technologies (LON:BVM 2.75p/£2.78m). Following earlier disposals in May 2012, Feedback Data has been the Company’s only revenue generating operation. Consequently, the disposal of Feedback Data constitutes a fundamental change of business under Rule 15 of the AIM Rules and is therefore conditional on the approval of Shareholders. The previous disposals left the Company with significant debts, which are currently secured against the Company’s premises. Negotiations to dispose of these premises are on-going with completion expected in 2013. On completion of the property disposal, the Board expects to repay all the Company’s outstanding indebtedness. The Board is now of the opinion that the revenue and profits derived from Feedback Data are not sufficient to fully offset the central costs associated with the Company being on AIM, and the Board believes that the Company does not have the necessary capital or the ability to raise further capital to maintain a competitive product offering in the access control and attendance monitoring market. As such, the Disposal represents the best chance for the Company to realise some value for that business for Shareholders. The Consideration payable by Belgravium for Feedback Data is £600,000 in cash on completion (subject to adjustment on the basis of the cash and debt position of Feedback Data at completion). The proceeds of the Disposal will be used to pay down the Company’s debt with the remainder retained for working capital purposes while the Company looks for suitable opportunities in the near future.

Ferrex (LON:FRX 1.12p/£9.06m)
Ferrex, the iron ore and manganese development company focused in Africa, announced that pursuant to the agreement announced on 14 January 2013 regarding the Company being granted the 309 sq km Megaba iron project in Gabon in West Africa, Ferrex has agreed to purchase an additional 17 per cent of Ressources Equatoriales SARL, from minority shareholders, for 40m new Ordinary Shares of 0.5p each in the Company, bringing its interest in Megaba to 82 per cent. Under the terms of the Agreement, the 40m new Ordinary Shares will be issued at a price of 2.5 pence per share. Following Admission, these Consideration Shares will represent 4.97 per cent of the enlarged issued Ordinary Share capital of Ferrex.

Hydro International (LON:HYD 92.5p/£13.28m)
Hydro International a leading provider of environmentally sustainable and innovative products for the control and treatment of water announced that, further to the previously announced changes to the Board, Bob Andoh intends to step down as a Director, following the appointment of the new Chief Executive Officer, Michael Jennings on 22 July 2013. Bob will continue to act in the role of Chief Technology Officer. Michael has spent his career in product-led technology businesses, in increasingly senior leadership positions with AlliedSignal, Ingersoll-Rand, and Flextronics. From 2004 he was Managing Director of BOC Edwards Industrial and Pharmaceutical Systems Division which had sales of EUR200m and 1000 employees. Michael has a track record of driving business growth through the development of commercial product strategies and through international expansion, where his experience includes the USA, Europe and Asia, as well as the creation of operations in China.

ICAP (LON:IAP 297.4p/£1,921.77m)
ICAP this morning announced its full year results, that group revenue decreased by 12 per cent to £1,472m with profit before tax decreasing by 20 per cent to £284m marginally ahead of previous guidance. Electronic Markets and Post Trade Risk and Information contributed 66 per cent of operating profit. Key developments include the creation of the Global Broking division, the strengthening of EBS and the launch of i-Swap in US dollars. £60m of cost savings was delivered this year, £10m more than was previously announced. The group operating profit margin came in at 21 per cent (2011/12 – 22 per cent). EPS (adjusted basic) was down 18 per cent to 33.0p and the Company had an ongoing free cash flow of £274m (2011/12 – £268m), representing a profit conversion of 130 per cent resulting in net cash of £25m (2011/12 – net debt £82m).  The proposed final dividend of 15.4p per share has been suggested with a full-year dividend of 22.0p per share (2011/12 – 22.0p), reflecting the continuing strong cash generation and confidence in ICAP’s medium-term prospects. Michael Spencer, Group Chief Executive Officer, said: “This has been an extraordinarily tough year in the wholesale financial markets. Trading activity across all asset classes was negatively affected by a combination of cyclical and structural factors including the depressed global economy, a low interest rate environment and lack of clarity around some aspects of regulatory reform. ICAP’s financial performance reflects these extremely challenging conditions.

Instem (LON:INS 108p/£12.71m)
Instem, a leading provider of IT solutions to the global early development healthcare market, announced the acquisition of Logos Technologies for an initial cash consideration of £0.55m, and further consideration of up to £4.45m payable subject to performance (in a mixture of cash and shares at the Company’s discretion). The acquisition, which includes the subsidiaries Logos EDC Solutions Limited and Logos Technologies Inc, is described as a strategic move by Instem into the early phase clinical market and is expected to be earnings enhancing in the first full financial year of ownership. Logos’ ALPHADAS(R) software suite is an e-source data capture system and site automation software suite for early phase clinical studies, with the overall company generating revenue for the year ended 30 September 2012 of £0.75m, an increase of 114 per cent on the prior year.

Journey Group (LON:JNY 4.5p/£14.40m)
The Company announced that it proposes to undertake a Share Consolidation of 1 New Ordinary Share for every 25 Existing Ordinary Shares, with the fractional entitlements arising from the Share Consolidation being aggregated and sold in the market and for the benefit of the Company. Following the Share Consolidation, Shareholders will still hold the same proportion of the Company’s ordinary share capital as before the Share Consolidation (save in respect of fractional entitlements and subject to any exercise of Options and Warrants). Other than a change in nominal value, the New Ordinary Shares will carry equivalent rights under the Articles of Association to the Existing Ordinary Shares.

LiDCO Group (LON:LID 11.12p/£21.56m)
LiDCO Group, the cardiovascular monitoring company, announced that Ashford and St Peter’s Hospitals NHS Foundation Trust have incorporated LiDCOrapid (v2) into their Enhanced Recovery programme for patients undergoing major bowel surgery, resulting in patients now being able to return home almost a week earlier than they would have been able to in 2008. The Enhanced Recovery programme is being adopted throughout the NHS, with a focus on fluid management technologies to help patients become mobile as soon as possible after surgery. From April 2013, the NHS in England will provide payment incentives to increase the numbers of fluid monitored surgery patients from 40,000 to 80,000 patients per year. Terry O’Brien, Chief Executive Officer of LiDCO, commented: “…This is one of the first hospital trusts in the UK to purchase our recently launched multi-parameter monitor. The non-invasive nature of the LiDCOrapid (v2) technology means that patients can be monitored throughout the entire surgical pathway. More comprehensive peri-operative assessment of the fluid status of the patient is now possible, which together with advances in surgery, provides a strong foundation of care to achieve the best possible outcomes.”

Lombard Risk Management (LON:LRM 10.12p/£23.53m)
Leading global provider of collateral management, liquidity and regulatory reporting and compliance solutions for the financial services industry announced its final results for the year to 31 March 2013. Revenues increased by 31 per cent to £16.8m (2012: £12.8m) of which the second half was £9.0m (2012: £6.4m). Licence revenues was £8.2m (2012: £6.0m). EBITDA increased 77 per cent to £5.3m (2012: £3.0m). Profit before tax was up 56 per cent to £3.9m (2012: £2.5m). Cash at the end of the period was £1.9m (2012: £0.1m) with net cash of £0.2m (2012: net debt of £2.4m). During the period, 33 contracts were signed for COREP, of which eleven are new names. The period in question also saw significant sales of the REFORM® platform to satisfy DFA and EMIR reporting requirements. FY 2014 opens with record revenue backlog in place. A final dividend 0.040p per share (2012: 0.035p per share) has been recommended to shareholders. The Board continues to view the future with optimism.

PhotonStar LED Group (LON:PSL 9.75p/£10.96m)
PhotonStar LED Group, the UK designer and manufacturer of smart LED lighting solutions, announced that it has received a grant from the UK Department for Energy and Climate Change (DECC) Energy Entrepreneurs Fund for up to £372,269. The amount, which will be paid in instalments on the completion of development certain milestones in the current financial year, will be used to develop further PhotonStar’s ChromaWhite smart circadian retrofit LED lighting solutions, particularly the ChromaWhite smart lamp, a standard lamp form factor, with full wireless control. ChromaWhite is the Group’s next generation light engine technology, which allows microprocessor controlled colour tuning and superior light quality, at an extremely competitive price-point.

Proactis (LON:PHD 22p/£6.95m)
Aim listed global Spend Control and eProcurement provider announced that the Group has developed its own mobile app development platform; PROACTIS CONNECT, on which it will launch various eProcurement Apps. The Group has developed PROACTIS CONNECT to target distinct processes that can benefit from mobile technology to streamline internal procurement and boost productivity. The platform is built on top of the Group’s existing framework allowing mobile applications to integrate into PROACTIS’ suite of Source-to-Contract and Purchase-to-Pay software applications and utilises existing PROACTIS architecture for fast-tracking future eProcurement applications. The first app to be available in iStore this month is Deputy User.  Users of PROACTIS can download the app as a native iOS application with a native Android version scheduled for release shortly.

The TEG Group (LON:TEG 6.5p/£12.25m)
The TEG Group, the green technology company, which develops and operates organic waste composting and energy plants, has announced it has reached a composting landmark in that it has now recycled in excess of 1m tonnes of waste at its nine owned and operated composting facilities since it started operations in 2006. Sufficient to fill the whole of Wembley stadium, diverting this waste from landfill has saved the emissions of landfill greenhouse gases equivalent to over 200,000 tonnes of CO2. TEG anticipates that legislation will continue to support the expansion of the market for the foreseeable future. Landfill Tax is expected to rise again in April 2014, further increasing the attractiveness of TEG’s plants and technologies, and interest in both composting and anaerobic digestion continues to grow strongly.

Xenetic Biosciences (LON:XEN 7.25p/£28.74m)
Xenetic Biosciences made two announcements during the week. The most recent one that it has successfully completed Phase I, the initial safety trial for MyeloXen(TM), and has now treated the first patients in Phase II, the dose escalation part of the trial. MyeloXen(TM) is the Company’s novel treatment for Multiple Sclerosis (MS) and based upon ImuXen(TM), the Company’s patented liposomal technology. Having completed Phase I of the trial on six healthy volunteers without any adverse event, the Company’s Russian partner, Pharmsynthez, has now started Phase II of the trial, administering the candidate to 12 patients at escalating dosing levels in order to establish the safe dose level for MyeloXen(TM). In the final element of the trial the then-established dosing range will be applied for further safety, surrogate efficacy and mode of action analysis. The previous announcement made this week was the commencement of the ErepoXen™ Phase III trial for the treatment of anaemia, where its Russian partners are now making significant progress on the collaboration. They expect to make further announcements on additional clinical candidates in due course.

Zytronic (LON:ZYT 169.5p/£25.33m)
AIM listed specialist manufacturer of international award-winning touch sensor products held its AGM on the 28 February, during which it provided a trading update where it confirmed slower first half performance due to the absence of business which had accounted for approximately £2m of revenues in the prior period. The interim results for the first half are due to be announced on 21st May, and will show revenues of £8.5m and profit before tax of £0.8m. However, the conversion rate to orders is much slower than the Board anticipated and the result for the year will be significantly behind market expectations, with year to date profitability more than halved. An encouraging pipeline of opportunities is expected to lead to an improvement in orders and profitability across the remainder of the year.

*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.

7th May 2013

This week: Investment boosts DGP, IDEA exceeds expectations, Purple patch for COMS and OXB tie-in with Novartis

The FTSE gained 90 points last week to close at 6,614 (and the AIM All Share gained 8 points to close the week at 714) after the UK avoided a triple dip recession according to GDP figures the week before, and Eurozone interest rates being lowered to 0.50 per cent from 0.75 per cent. UK PMI data also helped the markets, with services rising to 52.9 in April from 52.4 from March, construction to 49.4 from 47.2 and manufacturing from to 49.8 from 48.6. The Bank of England interest rate decision takes place this week, with no significant changes expected, and a meeting of G7 nations’ finance chiefs in London takes place at the end of the week. Also being announced are manufacturing output and industrial production figures, and trade and construction output figures.

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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.

AGL Parsortix regulatory approval update, ARTA Issue of Equity, CFC trading update, COMS Acquisition, EGS Contract win & AGM Date, EGX Preliminary results, GDP African gold operations update, GWP Approval in Italy, IDEA Trading Update, IDH New distributor, IKA Patent update, ITM Sales update and presentation, MSYS placing up to £4.28m, OXB Collaboration with Novartis, RLD Government Agreement, RMM Repayment of debts, SKR earth moving contract win, SNX AGM Statement, SOG Trading update

Angle (LON:AGL 48.5p/£21.94m)
The specialist medtech company this morning announced the appointment of a specialist regulatory company, Medical Device Management (MDM), to manage the process of obtaining regulatory authorisations for the clinical use of the Parsortix cell separation system. MDM is focused entirely on the medical devices sector and has expertise worldwide in quality assurance systems, regulatory submissions and compliance. Its clients range from small innovative companies to international medical devices businesses. In the European Union (EU), marketing authorisation will be via a CE Mark, which will give approval for clinical sales throughout the EU. In the US, the process requires the submission of a 510(k) application to the FDA. Authorisation under 510(k) will allow the Company to make the product available throughout the US for use in treating patients. MDM’s initial analysis has confirmed ANGLE’s expectation of securing regulatory authorisation in the EU by the end of the current calendar year and making a regulatory submission to the FDA in the US in early 2014. Although ANGLE has not yet started to market Parsortix, there has been a stream of potential users expressing interest in the product, particularly in its harvesting capability. These include major hospitals, leading research groups and several commercial companies. Geographically, interest has come from across the UK as well as several international locations including the US, Canada and Australia.

Artilium (LON:ARTA 7.88p/£16.95m)
Artilium, the provider of innovative telecommunication software and solutions, announced an additional investment in the Company. HEVA invest, the investment company of its Chief Commercial Officer, has agreed to convert a loan of approximately €225,000 in shares at 8.5p; based on the improved performance of the Company and their strong belief in the Artilium technology. This loan had been provided to the group as part of the acquisition of United Telecom. Also Heva Invest agreed to invest a further €473,000 in shares at 8.5p. This is a premium of about 8 per cent on the current share price. With this transaction the Company is fully debt-free.

China Food Company (LON:CFC 13.88p/£9.91m)
China Food Company, the leading Chinese manufacturer of cooking and dipping sauces, last week gave an update on trading ahead of its Preliminary Results for the year ended 31 December 2012, which will be announced on Tuesday 21 May 2013. Since the last trading update, the Board confirmed that revenues during Chinese New Year, an important trading period for the Group, were in line with management expectations. The Group has been working to put a structure in place to enable it to move funds out of China, reported that this has now been successfully completed with the first receipt of funds to the Singapore holding company in April 2013 to cover a small amount of internal expenses. The Board confirms that the Group continues to seek a buyer for its animal feed business, and will update the market on this as appropriate. The feed business is now operating from its new factory and will make a positive contribution to the Group. The Board anticipates that the operational cash flow from the feed business will exceed the interest payable on the Group’s loan stock. Once the feed business has been sold, the anticipated proceeds will be used to repay the outstanding loan stock.

Coms (LON:COMS 2.32p/£7.92m)
Coms announced it has acquired the broadband customers and certain other assets of So Purple Tech Limited trading as ADSL24. This includes almost 4,000 broadband customers as well as cloud based mail and hosting for a total consideration of £800,000, of which £50,000 is in cash and £750,000 in Coms ordinary shares at an agreed price of 1.8p per share. At 30 June 2012 So Purple Tech Limited had gross assets of circa £40,000 and the ADSL24 network presently generates a monthly gross margin of approximately £20,000 on revenues of circa £75,000. As part of the same transaction, it has been agreed to sell £50,000 of Ordinary Shares to Gavin Wheeldon (So Purple CEO), also at a price of 1.8p per share. Both Gavin Wheeldon and So Purple Tech Limited have agreed that sales of their shares will be limited to 5m per month and no more than 300,000 per day.

eg solutions (LON:EGS 82.5p/£13.20m)
eg solutions, the global back office optimisation software company, announced that it has won an initial project for its eg operational intelligence(R) solution with a new UK client. Following a competitive process eg has been awarded a contract with one of the UK’s friendly societies to implement the eg operational intelligence(R) software and operations management best practices. The initial project is for a roll-out to 200 users in its life and pensions division. Subject to the success of this project, there is the potential for further roll-outs to an additional 900 users in other divisions. Chief Executive Officer Elizabeth Gooch, commented: “Competition in the Back-Office Workforce Optimisation market is increasing and this contract win demonstrates that we are competing effectively against other industry players.”

Energetix Group (LON:EGX  14.25p/£18.88m)
Energetix Group, the developer and provider of energy efficient products and retail energy services through the Flow brand, announced preliminary results for the year ended 31 December 2012. Losses were narrowed to £5m from £6.75m in 2011, whilst on the balance sheet, cash was at £12.15m (as at 31 December 2011: £0.49m). Operational highlights during the period include independently verified testing at Gastec confirming boiler generation capability, home trials verifying generation in line with the Gastec results and business model, the starting of a programme of testing of key components to secure product reliability, and the supply chain team being established to ensure efficiency and value. The Company also contracted Carillion Energy Services contracted to provide installation services for the initial product rollout, and launched the Flow brand and consumer website: Looking ahead, having successfully launched Flow Energy with energy only tariffs generating revenue from April 2013 onwards, and an experienced senior management team and infrastructure in place, the Company feels it is in a position to build a market leading energy services business.

Goldplat (LON:GDP 10.12p/£17.05m)
Goldplat, the AIM listed gold producer in Africa, announces an operations update on its two market leading gold recovery operations in South Africa and Ghana, which recover gold from waste products of the primary gold mining industry, and an update on Goldplat’s gold recovery expansion plans in Africa. Goldplat’s South African gold recovery operation, GPL, continues to produce robust cash flows with particular emphasis on fine carbon processing which has expanded significantly over the past six months with new supply contracts recently signed with major South African gold producers. The Company has also continued to invest in new capital projects to increase the gold recovery processing capacity at GPL, reduce its stockpile inventory and in turn further increase the South African recovery operations profitability.  With this in mind, GPL commissioned the new tailings re-treatment carbon-in-leach (CIL) plant on time and within budget in March 2013. This CIL will reprocess selected tailings which are currently on site at GPL and that are estimated to comprise five years’ worth of production.  In addition, a second rotary kiln, which will double the available production capacity at GPL and will process the significant stockpile of high-grade wood chips (estimated to equate to seven years of current capacity) is on budget with commissioning planned for end of July 2013. The Company’s second gold recovery operation in Ghana, GRG, which enjoys a tax free status until 2016, continues to be profitable not withstanding the margin pressures that it has sustained over the past reporting period. To mitigate these margin pressures Goldplat has instituted tighter controls in the procurement department and recently agreed more favourable terms on its toll treatment agreement with Endeavour Mining Corporation’s Nzema Mine in Ghana, GRG’s biggest profit centre, to take into consideration the changing environment in the gold industry. In order to increase the processing capacity of GRG and widen the range of the products that can be treated at the plant, the Company is planning to add an additional spirals circuit to the Fine Carbon Section which will improve the quality of the feed to the incinerator; a thickener has been delivered to site and will be erected in May 2013 to improve the gold recovery at the CIL plant; and a rotary kiln has been purchased for installation at GRG. The kiln is currently in South Africa with installation expected to be complete in the second half of FY14.  Goldplat is developing a third gold recovery operation in Burkina Faso, Midas.  The development of the new gold recovery operation has been delayed for a number of reasons including changes in local environmental and gold export legislation and the shift in Midas’ previously planned focus from an artisanal tailings operation similar to that at GRG, to one focussing on the recovery from products such as high grade fine carbon and mill liners from the major gold producers. Midas has re-commissioned the Environmental Study for the site in Dano which is expected to be completed at the end of August 2013 with all operating licences to be in place by the end of the year.

GW Pharmaceuticals (LON:GWP 50.25p/£67.02m)
GW Pharmaceuticals, a biopharmaceutical company focused on discovering, developing and commercialising novel therapeutics from its proprietary cannabinoid product platform, has announced that it has received commercialisation approval for its prescription medicine Sativex(R) in Italy. A full marketing authorisation has been granted by the authorities in Italy for the treatment of moderate to severe spasticity in Multiple Sclerosis (MS) patients who have not responded adequately to other anti-spasticity medications. This license to market Sativex(R) in Italy comes by way of the publication of Sativex(R) in the Italian Official Journal (Gazzetta Ufficiale) and reflects that regulatory, pricing and reimbursement approvals are now in place for an expected commercial launch in September by GW’s partner, Almirall S.A. The reimbursed price of the medicine granted by the authorities in Italy is consistent with the reimbursed Sativex(R) price in Spain. The publication of Sativex(R) in the Italian Official Journal triggers a €0.25m milestone payment from Almirall to GW. The approval in Italy brings the total to 21 countries that have approved Sativex(R) for use in the treatment of MS spasticity.

Ideagen (LON:IDEA 20.25p/£24.65m)
Ideagen, a supplier of Compliance based Information Management solutions, provided a pre-close trading update for the year ended 30th April 2013. The Company reported that its three key metrics of revenue, adjusted EBITDA and net cash are all expected to show significant growth over last year and be comfortably ahead of current market estimates. The Company expects to report revenue growth of no less than 62 per cent to £6.5m (2012: £4.0m) and adjusted EBITDA growth of no less than 70 per cent to £2.0m (2012: £1.2m). Cash at year end was approximately £6.4m (2012: £1.5m) due to strong operational cashflow representing approximately 100 per cent of adjusted EBITDA and the £6m equity fundraising announced in December 2012. Revenue growth has been particularly encouraging in both the US and UK Healthcare sectors driven by the acquisitions of Plumtree Group Ltd and Proquis which have been successfully integrated into the group and have both delivered significant organic revenue and profit growth during the year. The Company will issue its preliminary results in mid-July.

Ilika (LON:IKA 29.75p/£13.63m)
Ilika, the advanced cleantech materials company, has announced that further to the granting of its patent application covering its lower cost metal alloys and their use as electro-catalysts in PEM (Proton Exchange Membrane) fuel cells in the USA, it has also received notification that this patent has now been granted in Japan. In a PEM fuel cell, a controlled reaction occurs between hydrogen and oxygen. This reaction requires electro-catalysts, which are currently based on platinum. Ilika has developed a novel platinum-free catalyst, which on a cost/performance basis, has been shown to be 70 per cent cheaper than the current industry standard. As reported in April 2013, Ilika has submitted positive cell performance data and material samples for evaluation by select automotive manufacturers based primarily in the US and Japan. Therefore, the grant of this patent in both the USA and Japan confirms that the Company has secured the intellectual property in two of the major markets in which Ilika intends to commercialise its proprietary technology. Furthermore, Ilika’s development partner in Taiwan has now successfully manufactured the catalyst material, which is a critical component of the PEM fuel cell, to Ilika’s specification at the kilogram scale. This development progress ensures that the industrial production process can be readily transferred to any volume-manufacturing partner.

Immunodiagnostic Systems Holdings (LON:IDH 360p/£102.25m)
Immunodiagnostic Systems Holdings announced that it has appointed Beijing Leadman Biochemistry Technology Co as its exclusive distributor for the IDS-iSYS instrument and assays in China, and that it has also signed a research and development agreement which covers the planned conversion of over fifty of Leadman’s proprietary immunoassays for use on the IDS-iSYS instrument. Leadman which is a developer, manufacturer and distributor of in vitro diagnostic products in China will have the right to market the IDS-iSYS instrument and IDS automated assays in China and will act as IDS’s master distributor by selling IDS products directly to laboratories as well as connecting IDS products into its nationwide distribution network, with the three year distribution agreement commencing from the date of the China Food and Drug Administration (CFDA) approval of the IDS-iSYS instrument and the first IDS assay (anticipated in approximately 12-14 months). The R&D agreement with Leadman accelerates IDS’s strategy of increasing the range of tests available on the IDS-iSYS instrument.

ITM Power (LON:ITM 47p/£57.69m)
The energy storage and clean fuel company announced the sale of two reference plants built on the HPac platform to South America and Hungry, being the first two sales to these territories, adding to the first reference plant based on the HPac platform being sold in Russia in March. The Company announced that it was present at the Hydrogen and Fuel Cell Fair at the Hannover Messe in April. It provided its HFuel hydrogen refuelling station to refuel the fleet of fuel cell electric vehicles at the event, with the Company’s products resulting in a large pipeline of leads which have been followed up. In particular, Utility scale energy storage applications in the form of both ‘Power-to-Gas’ and ‘Power-to-Gas plus Methanation’ dominated the enquiries and were the subject of dedicated discussions and presentations in the public and technical forums, and quotations that have been issued are much larger in size than last year and are predominantly to international companies.

Microsaic Systems (LON:MSYS 47.5p/£20.21m)
Microsaic Systems, the developer of chip-based scientific instruments announced a conditional placing at a price of 43 pence per share on Friday last week to raise up to £4.28m. This represents a discount of approximately 9.5 per cent. to the closing mid-market price of 47.5 pence on 2 May 2013. The aggregate participation in the placing by Microsaic directors is £306,000. The placing is subject to the grant of the relevant authorities at a Company General Meeting to be held on 24 May 2013. The net proceeds of the placing will provide the Company with the additional working capital and capital resources to execute its organic revenue growth plans, which are aimed at: (i) generating volume sales of its miniaturised MS (mass spectrometry) system by establishing the Company as an OEM partner (Original Equipment Manufacturer) to market leaders in scientific instruments in a number of parallel application areas, and (ii) developing its own sales channels to customers in niche, growth application areas.  The strengthened balance sheet following completion of the Placing is also expected to increase the attractiveness of the Company to potential commercial partners. The Placing will also enable the Company to continue investing in the development and production of its instruments and technologies. Development plans include variants of the 4000 MiD® for specific applications, enhancements to the ‘Plug & Play’ functionality of the 4000, as well as further development and productisation of the Company’s triple quadrupole MS system. In order to accommodate its growth plans, the Company also plans to lease suitable new premises that can better serve the needs of the business going forward, in particular its R&D and marketing activities.

Oxford BioMedica (LON:OXB 2.08p/£29.39m)
Oxford BioMedica, the gene-based biopharmaceutical company, announced an agreement with Novartis to manufacture clinical grade material utilising Oxford BioMedica’s LentiVector(R) gene delivery technology. Oxford BioMedica will be responsible for manufacturing several batches of a lentiviral vector encoding CTL019 technology, which will be used to transduce patients’ immune cells (T-cells) in an ex vivo process before they are re-infused into patients. CTL019 targets a protein called CD19 that is associated with a number of B-cell malignancies including chronic lymphocytic leukaemia, B-cell acute lymphocytic leukaemia and diffuse large B-cell lymphoma. The Company will also provide certain process development services and expects to receive between £2.5m and £4m from Novartis over the next twelve months.

Rambler Metals and Mining (LON:RMM 25.25p /£36.17m)
Rambler Metals and Mining, the Newfoundland copper and gold producer, explorer and developer, has made a payment of C$0.5m to Sprott Resource Lending Partnership, which reduces the outstanding balance on the Company’s recently renewed credit facility to C$ 6.5m. Further reductions to this outstanding facility are planned over the coming months, with the intention of having the facility repaid by the end of calendar year 2013. The management believes that this payment demonstrates Rambler’s commitment to paying off its debts and is optimistic that with incremental operational improvements more free cash flow can be generated, allowing it to become more aggressive with its debt repayment schedule.

Richland Resources (LON:RLD 4.88p/£5.76m)
Richland Resources the gemstones producer and developer announced that the Company’s wholly owned subsidiary, TanzaniteOne Mining Limited (TML) has, signed a Letter of Intent that sets out the proposed terms upon which a New Mining Licence will be held, how operations thereunder will be conducted, and how costs and revenues will be allocated. It is intended that a formal, legally binding agreement, confirming the terms in the LOI will be entered into shortly between TML and STAMICO, the mining arm of the Tanzanian Government. The New Mining Licence will be held between TML and STAMICO on a 50:50 basis. STAMICO will pay to TML a sum to be agreed that represents fair and reasonable value for the 50 per cent interest of the New Mining Licence. Upon agreement, STAMICO can pay for their equity in full or utilise 40 per cent of the annual profits due to them from the mining of tanzanite. TML and STAMICO will use their respective reasonable endeavours to curb tanzanite smuggling and illegal mining operations in the area to which the New Licence relates, and which have an adverse effect on the profitability of the operations under the New Licence and underground mining operations. In particular, STAMICO will facilitate and liaise with the Tanzanian Government authorities to ensure that necessary regulatory and law enforcement actions are taken in a timely manner and mining operations are conducted in a safe, secure and conducive environment.

StatPro (LON:SOG 86p/£58.03m)
StatPro Group, which provides portfolio analysis and asset pricing services for the global asset management industry, has reported that trading in the first quarter of 2013 was in line with expectations, both at the revenue level and against its operational and profit targets. The management believes that it is continuing to make good progress towards its strategy of becoming a purely cloud-based analytics service provider, capitalising on cloud computing to enter new regions and market tiers, as well as transforming its existing customer base. The sales pipeline for StatPro Revolution continues to build and as at the end of March 2013 it had 178 clients for StatPro Revolution compared with 156 clients at the end of December 2012.

Sunkar Resources (LON:SKR 8.9p/£30.38m)
Sunkar Resources announced that its wholly owned subsidiary, Temir Service LLP (Temir), has signed a new earth moving contract with the general contractor building the Beineu – Tassai railway line in Western Kazakhstan. The value of the contract is estimated to be approximately KZT 1.85bn (US$12m). The Company expects to receive a pre-payment, amounting to 30 per cent of the total contract value, within 20 business days from the contract date. Temir is currently executing its first earth moving contract, which was concluded with the same general contractor, in October 2012, for another stretch of this new railroad. It has finished approximately 65 per cent of the total workload of this first contract, and Temir expects to complete most of the works associated with this contract by the end of June 2013. Operations under the existing contract were suspended for 2 weeks during December 2012 and 3 weeks during January 2013 owing to adverse weather conditions. This new contract is significantly larger than its predecessor.  As the deadline for the completion of the works under the new contract is November 2013, Temir’s management intend to engage qualifying third parties to carry out certain parts of the works. Temir completed its mining programme for 2012 during the third quarter of that year.  It used the period from the completion of its 2012 mining operations until the start of work on the first earth moving contract to start pre-stripping operations for the 2013 mining programme.  Consequently its management team are satisfied that it can complete the 2013 mining programme during the third and fourth quarter of the current year with the equipment on site. Serikjan Utegen, the Company’s CEO, commented: “Our principal goal remains the development of the Chilisai Phosphate project.  However, the revenue from these earth moving contracts has and will continue to make a significant contribution to the working capital of the Company.”

Synectics (LON:SNX 430p/£75.55m)
At the Annual General Meeting of Synectics last week, the Chairman, David Coghlan, made the following statement: “After a good performance in 2012, the momentum of Synectics’ businesses has continued well in the current year. In February and March of this year we announced that the Synectics’ Systems and Synectics’ Integration and Managed Services divisions had been awarded large contracts in Singapore and in the UK respectively. Performance on these contracts is proceeding to plan, and will underpin the revenue growth the Company expects to deliver in the current financial year.” The Company said that overall trading across the Group remains satisfactory, and confirmed that results for the year will be in line with market expectations. Synectics also separately this morning announced a new three-year contract with Stagecoach, one of the UK’s largest bus operators. Synectics, which has worked with Stagecoach for ten years, will supply, install and maintain new CCTV solutions across Stagecoach’s fleet of vehicles under the continued partnership, worth more than £5m over three years. The contract addresses new requirements, for example from Transport for London, for a higher quality of captured image and increased storage capacity.

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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.