Small Cap Wrap: Month: July 2013

AIM Breakfast - Archive

16th July 2013

This Week: Adults driving BMY, DDD streaming on Google Play, IDEA generating fast growth

The Small Cap Wrap Team will take a Summer break and have the last Small Cap Wrap for the Summer on August 13th and will return on September 10th. Happy Holidays!

The almost immediate U-turn from the Fed on quantitative easing and clear signals from other major central banks of an open-ended intervention is continuing to provide a favourable backdrop for most equity markets. The promise of stable earnings and yield from sectors such as software, personal goods and paper continues to bolster the FTSE 100, which rose another 178 points last week to 6,552. The resource-heavy AIM All-Share index continues to lag behind, rising just 11 points last week to 714. M&A deals and better-than-expected results from some banks have maintained the momentum so far this week, with the news of Chinese Q2 GDP growth slowing to 7.5 per cent coming as no surprise. The rest of this week sees the US releasing Housing Starts/Permits, the Fed Beige Book and Initial Jobless Claims. In the UK, Jobless Claims Change and MPC Minutes will no doubt attract some attention. However, with the central banks showing no tolerance for even a moderate market tumult, any negative reading will continue to be seen as a positive.

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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 Interims; APH Pre-Close Trading Update; ANCR Pre-Close Trading Update; BMY Interim Management Statement; BJU Pre-Close Trading Update; CAU Trading Update; COMS YourForum Agreement; CNS Sale of Corero Business Systems Limited; DDD 3D App on Google Play; EGS £1.2m Contract; FDEV AIM IPO; GTC Trading Update; GOOD Placing and Open Offer; HAL/HALO Trading Update; IDEA Final Results; IKA Full Year Results; LMT Trading Update; MDM Dugbe Project Update; NEW Positive Update from Denmark; NORD Q2 Operating Results; SAR Preclinical Candidate Selected; SCLP SCIB1 8mg Update; SPH Trading Update; SPRP Pre-Close Trading Update; UBC Transaction in Own Shares

Access Intelligence (LON:ACC 2.875p/£6.76m)

Access Intelligence, the supplier of Software-as-a-Service (SaaS) solutions for the full life cycle management of a company’s governance, risk and compliance, has reported that revenues were up 6 per cent year on year to £4.2m for the six months ended May 2013. Contracted revenue not yet invoiced rose 25 per cent to £5.5m; recurring revenue of £3m was 72 per cent of total revenue. Loss before taxation decreased to £30,000 compare with £216,000 in the same period last year. Another highlight in the period was the recognition of Due North and AIControlPoint brands by Gartner.

Alliance Pharma (LON: APH 34.75p/80.76m)

Specialist pharmaceutical company Alliance Pharma announced its pre-close trading update ahead of the announcement of its interim results for the six months, ended 30 June 2013. Management expectations for trading in the first half of the year has been in line, with turnover at £22.8m. Despite the unavailability of ImmuCyst(TM), turnover has steadily increased by four per cent, and ImmuCyst(TM) is currently expected to become available again during the second half of 2014. There was also a reduction in Nu-Seals(TM) sales to £1.6m. Hydromol(TM) sales came in at £2.6m in the first half and antimalarial products acquired in August 2012 contributed £0.8m of sales in the first half, and the stoma care products acquired in October 2012 contributed £2.0m of sales. The first half of 2013 also benefitted from Alliance’s toxicology product reaching the peak of its sales cycle as they continue to explore a number of acquisition opportunities, with the outlook for the full year looking promising. The Company’s interim results for the six months ended 30 June 2013 are scheduled to be released on 11 September 2013.

Animal Care (LON: ANCR 141p/29.25m)

Animalcare, a leading supplier of veterinary medicine., provided a pre-close trading statement ahead of the publication of results for the year ended 30 June 2013. Animalcare’s growth is well ahead of the general market, with revenues 11 per cent ahead of the previous twelve months and latest market statistics showing sales of veterinary medicines for companion animals in the UK to be flat. Revenue of Animalcare’s core Licensed Veterinary Medicines group was up by 22 per cent compared with the prior year, whilst the Company reported slightly contrasting revenues for the Companion Animal Identification group which were down in the period as a result of continued competition in the market, however unit sales were slightly ahead of management expectations. Overall the Animal Welfare groups performed well, with revenues up during the period. Three new products were launched in the year and a fourth received its Marketing Authorisation in June, with the launch expected in the first half of the current financial year. Animalcare completed its relocation to new premises in the York area offering a more improved and efficient working environment with much more capacity for potential future growth, without any disruption caused to business. The group continues to focus on its stated strategy of investing in intellectual property protected products and services that will deliver future sustainable growth. Full year results will be announced on Wednesday 25 September 2013.

Bloomsbury Publishing (LON:BMY 144.25p/£106.52m)

Bloomsbury Publishing has issued its Interim Management Statement in respect of the period 1 March 2013 to date. The Group is trading in line with management’s expectations. In the three months ended 31 May 2013, revenues were up by 19 per cent year on year. Each of its global divisions grew their revenues in the period, with the Adult division standing out with growth of 21 per cent year on year following the early success of And the Mountains Echoed by Khaled Hosseini, which was released in May. Half of the sales of this title in the period were e-books. Other best-selling titles, which were from the Adult division, were Paul Hollywood’s Bread and How to Bake, which led the continuing strong sales of cookery titles, Wisden Cricketers’ Almanack and in the US The Cooked Seed by Anchee Min. Print title revenues increased by 16 per cent and contributed the majority of the year on year increase in total revenues. In addition, there was also a 31 per cent increase in digital title revenues and a 25 per cent increase in rights and services revenues. The two acquisitions made during the 2012/13 financial year, Fairchild Books and Applied Visual Arts Publishing, together contributed 1 per cent of the 19 per cent year on year increase in Group total revenues in the period. During the period, Bloomsbury published its first Bloomsbury Activity Apps in the Children’s & Educational division. These were developed with Shoo Fly and included in the Guardian’s Top 50 Children’s Apps of 2013. Subscriptions to Drama Online, the digital resource for academics, students and performers, are significantly ahead of expectations. At 30 June 2013 the Group had net cash of £8.5m (30 June 2012: £10.0m). The only other news is that Sarah Thomson has decided to step down as a non-executive director following the expiry of her term.

BrainJuicer Group (LON: BJU 259.5p/£32.60m)

Innovative, online market researcher BrainJuicer Group released a half year (H1) update on trading. The Company will announce its half year results for the 6 months to 30 June 2013 on 20 September 2013, and enters its closed period on 20 July 2013. After a difficult end to 2012, BrainJuicer looks to be back into growth with sales up some 4 per cent (over a strong comparable period), gross profit were up approximately 6 per cent, and Juicy products continuing to make up most of the Company’s revenue (66 per cent of revenue as in 2012). Revenue grew strongly in the Company’s two biggest markets, the UK and the US and in one of its newer markets, Brazil, but declined in Continental Europe and China (against a very high comparative period). The strong measures taken by management in the latter part of 2012 meant overheads in H1 were below those in the comparable period. For the year as a whole BrainJuicer continues to project cost growth (before bonus payments) in low single digits. BrainJuicer’s financial position and cash generation remain very strong. At the end of June, the Company held a cash balance of £5.5m, a substantial increase on the end December 2012 figure of £3.8m. BrainJuicer has no debt. Accordingly the Board is considering whether a return of some of this cash to shareholders is appropriate and, if so, what would be the most suitable mechanism for affecting such a return. Subject to the usual caveat over limited revenue visibility, the Board considers that the Company is in a position to meet market profit expectations for 2013.

Centaur Media (LON:CAU 40.875p/£58.41m)

Centaur Media, the business information and events group, has reported that it expects to report interim profits slightly ahead of market expectations following the IMS published on 15 May 2013, with reported revenues up 10 per cent on the prior year, EBITDA margins maintained at 18 per cent and adjusted profits before taxation up 8 per cent. Underlying revenues are, as anticipated in the IMS, expected to be 3 per cent lower than in the previous year. Net debt at 30 June 2013 has reduced as expected to £19.5m, a multiple of approximately 1.5 times anticipated EBITDA. The company continues to make good progress in rebalancing revenues in favour of digital, paid for content and events. Digital and events revenues now account for 34 per cent and 36 per cent, respectively, of total revenues, with both revenue types growing on a reported basis by approximately 27 per cent compared to last year. Paid for content revenues now account for 28 per cent of total revenues compared to 24 per cent last year.

Coms (LON: COMS 4.35p/£23.43m)

Coms has signed an exclusive Joint Venture agreement with YourForum to assist the national push for Central Government and Local Authorities to provide Broadband services across the country. In addition to broadband services a Smart Monitor software package will be provided in partnership with B.E.E.S. (Bio Eco Energy Solutions ) and made available to all users. As from August 1 2013 Coms Enterprise Limited will focus entirely on these digital inclusion projects and six dedicated members of staff will be transferred to the subsidiary to assist the Company and its partners to implement this initiative. The exclusive joint venture agreement with YourForum, will enable Registered Service Providers, Social Landlords and Local Authorities nationally to offer subsidised or – in some cases, free Broadband connectivity to their tenants and community groups, as facilitated by this unique Agreement, which exists to specifically provide Broadband services for the National push to assist Central Government and Local Authority ambitions of ‘digital inclusion’ for all across the Country. In addition to the Broadband services provided by COMS, the tenants have the option to participate in an energy saving initiative, a Smart Monitor software package provided in partnership with B.E.E.S. (Energy Cycle).

Corero (LON: CNS 14.25p/£12.20m)

Corero has announced it has entered into a conditional agreement to sell its entire legal and beneficial holding in Corero Business Systems Limited, CBS, the company’s subsidiary. The sale will be made to Civica UK Limited, amounting to 92 per cent of the issued share capital of CBS. The proceeds of the sale receivable on completion will be approximately £10.9m, net of repayment of bank debt. Further announcements show that Corero would have on a pro-forma basis at 30 June 2013 gross cash of $21.2m and net cash of $15.2m including the net proceeds from the sale. Following the completion of the sale it is intended to appoint Ashley Stephenson, Chief Executive Officer of the Corero Network Security division, to the board of the Company. The sale of CBS, which is still subject to shareholder approval, will result in Corero becoming exclusively focused in the network security market for which its strategy remains unchanged from that set out in the annual report for the year ended 31 December 2012, and the circular to shareholders dated 25 February 2013.

DDD Group (LON:DDD 13.875p/£18.93m)

DDD Group, the 3D solutions company, has announced that the Yabazam 3D video streaming app for Android(TM) powered 3D tablets is now available for download from the Google Play Store. Yabazam, DDD’s 3D video streaming service, features a wide range of programming, including originally made 3D movies, travel shows, music videos and animated shorts from a growing list of global content providers. The Yabazam 3D app brings these shows to glasses-free 3D tablets running the Android 4.0 (or later) operating system, including the Gadmei E8 8″ tablet and the Hampoo 10.1″ tablet which already include DDD’s TriDef(TM) 2D to 3D conversion apps. Yabazam has more than ninety 3D titles in its library available for viewing with a monthly subscription in the US and on a per-title rental basis in sixteen other countries worldwide. DDD is aggressively growing the range of 3D programs available on Yabazam and releases new 3D titles regularly.

eg Solutions (LON: EGS 78.5p/£12.56m)

eg solutions, the global back office optimisation software company, announced that it has won a hosted solution contract from a leading UK utility provider for the eg operational intelligence(R) suite (the hosted solution), worth £1.2m over three years and contributing £650,000 to revenue in the current financial year. The hosted solution will form part of a drive by the utility provider to improve productivity and reduce the cost to serve its business customers. It will provide real time operational work management, real time visibility of work-in-progress and consistent management information to support the utility customer’s pro-active performance management. The eg operational intelligence(R) software will be implemented across 525 staff in four functions – customer services, billing and industry data, risk and debt management, and service optimisation.

Frontier Developments (LON: FDEV 158p/£49.05m)

A leading developer of video games with studios in Cambridge, UK and Halifax, Canada, has announced the commencement of dealings in its Ordinary Shares on AIM. The Company has raised £4.0m through a placing and its market capitalisation at the placing price is £39.4m. Founded in 1994 by David Braben, co-author of the seminal Elite game, Frontier has an experienced management and development team that has consistently delivered high quality, innovative and commercially successful games in a continually evolving industry. Frontier’s proprietary “Cobra” technology powers its efficient, cross-platform software development spanning personal computers, tablets, smartphone and videogame consoles across a wide variety of game genres. The admission to AIM follows a pre-IPO fundraising that raised £2.8m. Frontier is debt free, has £7.2m of cash (as at 31 May 2013), and has entered into a revolving credit facility with Barclays Bank plc for £3.0m, so is in a strong position to take its business to the next stage. The share placing price was 127p per share, and closed at 154.5p at the end of first day of dealings up 22 per cent.

GETECH (LON: GTC 70.75p/£20.75m)

GETECH, the oil services business specialising in the provision of exploration data and geological exploration studies, announced a trading update in respect of its year ended 31 July 2013. On the basis of the strong performance of all parts of the business, Getech anticipates that its result for the full year to 31 July 2013 will exceed current market expectations, both in relation to revenue and profits. Getech’s Chief Executive, Raymond Wolfson, commented: “The combination of strong data sales and commitments to Globe has continued to underpin the performance of the Company. Our comprehensive Earth Systems Models, which build on the core of the Globe product, are attracting increasing interest and we are very pleased that demand for our proprietary services continues to strengthen.”

Good Energy Group (LON: GOOD 135p/£16.91m)

Good Energy Group is a 100 per cent renewable electricity supplier and has announced its intention to raise up to approximately £3.8m. The board announced its proposal to undertake a placing and open offer to raise the £3.8m in aggregate through the issue of new ordinary shares at 125p per share. £1.8m will be placed firm and then it is intended that £2m will be issued through the open offer, assuming full take up of the open offer. The issue price represents a discount of 16.9 per cent to the mid-market closing price on 10 July 2013.

HaloSource (LON: HALO 22.5p/£6.73m)

HaloSource gave a trading update and said that it is experiencing a significant positive shift in momentum in line with its strategic plan as negotiated contracts begin to deliver revenue with particular progress in the Water Purification segment. Revenue from orders shipped for the six months ended 30 June 2013 totalled US$5.9m (H1 2012: US$5.8m). The growth in revenues across business segments was approximately 19 per cent and 26 per cent for Environmental Water Remediation and Water Purification respectively, while Recreational Water was down 4 per cent from the same period a year ago. Total orders received for the six months ended 30 June 2013 totalled US$7.2m, equating to a backlog of US$1.3m carried over into the second half of 2013. Aggregating orders shipped and orders received, half-on-half growth for Environmental Water Remediation, Water Purification and Recreational Water was 24 per cent, 117 per cent and 11 per cent, respectively. The Company expects to ship the entire current backlog during July and August 2013.

Ideagen (LON: IDEA 20p/£24.35m)

Ideagen a supplier of Compliance based Information Management (CIM) software announced its unaudited preliminary results for the year ended 30 April 2013. The results represent the Company’s fourth consecutive year of revenue and adjusted EPS growth and demonstrate continued strong cash generation from operations. Revenue was up by 63 per cent to £6.51m (2012: £4.00m) of which recurring revenues of £3.1m covered 80 per cent of the fixed cost base. The adjusted PBT was up by 73 per cent to £1.87m (2012: £1.08m) and net cash grew to £6.37m (2012: £1.50m). During the period the acquisition of Plumtree Group Ltd strengthening the company’s position in the UK Healthcare sector underpinned by two further NHS contract wins; Western Isles and Forth Valley, under the Scottish NHS Framework agreement. Additionally a strategic reseller partnership was signed with Abbott Laboratories and there was a strong performance within the Aerospace and Defence sector with contract wins at the MOD, BAE Systems, and Northrop Grumman. The Company also announced a new contract with Dartford and Gravesham NHS Trust worth approximately £300k for the supply of the Company’s proprietary dartEDM document management solution.

Ilika (LON:IKA 24.5p/£11.85m)

Ilika, the advanced cleantech materials discovery company, as expected, reported revenues down 46 per cent to £1m for the year ending April 2013. The company had already warned of delays with a number of potential contracts and the impact of the decision by Energizer to close one of its business units. Notwithstanding the above, the management believes that the company’s strong relationships with existing development partners should mean that contracts which were delayed in 2013 will be converted or replaced in 2014. Furthermore, it has generated a significant number of new leads with major companies during the period. The cash position of £1.9m at the end of April 2013, together with an additional £709,000 raised through a share placing in May 2013 and new project wins, is expected to provide sufficient cash to fund requirements for the foreseeable future.

Lombard Medical Technologies (LON: LMT 169p/£75.62m)

Lombard Medical Technologies provided an update for the six months ended 30 June 2013, ahead of the planned announcement of its Interim Results on 29 August 2013. Trading in the first six months has been in line with expectations, delivering total revenue of £2.0m. Aorfix(TM) commercial revenue grew 8 per cent with revenue from the main EU markets growing 6 per cent and revenue from the Rest of World markets growing 9 per cent. In Europe, revenue and demand were strong in Germany and Spain, countering the effect of continued EVAR centre consolidation in the UK. The Company’s US launch plans are progressing according to plan. Fifteen new sales representatives and two regional sales managers have been recruited as planned and, in June, the new team attended and successfully completed the in-depth training programme about the use of Aorfix(TM) and the EVAR procedure. The sales team is now focused on increasing US physician knowledge of Aorfix(TM) and organising their participation in physician training programmes, which will commence at various US venues in August. As previously announced on 21 June 2013, FDA approval of the next generation Aorflex(TM) delivery system was received. The Company expects to launch Aorfix(TM) commercially in the US in late Q3 2013 and to hold a coordinated launch event at the VEITH symposium in New York City in November 2013.

MDM Engineering Group (LON: MDM 129p/£48.06m)

MDM Engineering Group Limited is a minerals process and project management company focusing on the mining industry. MDM is pleased to announce that it has received a Letter of Intent to complete the Detailed Feasibility Study, DFS, and Front End Engineering and Design, FEED, for Hummingbird Resources (LON:HUM) Dugbe 1 Project in Liberia. The Dugbe Project is located in the Dugbe Shear Zone, an area of 2,000km in central Liberia lying 40km northeast of the coastal town of Greenville. The Project is highly prospective and a gold project, and is currently HUM’s most advanced project with over 61,000m of drilling and a 3.8m ounce gold resource. The FEED will be conducted alongside the DFS in order to expedite the timeframe of mine construction, allowing the company to proceed to an engineering, procurement and construction contract at the end of the DFS. The DFS and Feed are expected to be completed by the end of Q3 2014.

New World Oil and Gas (LON:NEW 0.625p/£4.30m)

New World Oil and Gas, an oil and gas operating company focussed on Belize and Denmark, has received a positive update to the Competent Person’s Report (CPR) as published in the AIM Admission Document and dated 3 July 2012 from RPS Energy for Licences 1/09 and 2/09 of the Danica Jutland Project located in the highly prospective Jutland on-shore area in South Western Denmark in which New World holds a 25 per cent working interest. New data has identified a number of new smaller prospects rather than one larger reef structure at Jensen that had been previously identified using 2-D seismic. Moreover, RPS has assigned a 90 per cent chance to the presence and effectiveness of trap in the geological structure to hold oil and gas reservoirs.

Nordgold (LON: NORD 1.8p/£446.52m)

Nordgold announced its operating results for the second quarter and six months ended June 30, 2013. Highlights of the results show a rise of 82 per cent in lost time injury frequency rates (LTIFR) in Q2 2013 when compared to Q2 2012. Gold production for Q2 2013 was 232.6 koz, indicating a 41 per cent increase on Q2 2012 and a 27 per cent increase on Q1 2013. Nordgold’s newly constructed Bissa mine in Burkina Faso operated ahead of expectations, exceeding the initial full year production guidance for 2013 of up to 100 koz, with production of 112.5 koz in H1 2013. Revenues for Q2 2013 increased by 21 per cent from Q2 2012 to US$319.5m, representing an eight per cent increase from Q1 2013 at $296.8m. Furthermore gold and silver mining licenses for the Gross project were awarded in Q2 2013. A reduction of approximately US$40-50m in the 2013 сapex budget occurred due to lower spending on exploration and at the Gross project, which remains Nordgold’s principal development asset. June 30, 2013 saw net debt increase from US$740.9m at Q1 2013 to approximately US$800m, reflecting the dividend of US$44.6m paid at the end of June. Nordgold reiterates a 2013 full year production forecast of 770 – 850 koz.

Sareum Holdings (LON: SAR 0.925p/£14.07m)*

Sareum has announced the selection of a preclinical development candidate from its Aurora+FLT3 kinase programme, which targets Acute Myeloid Leukaemia (AML). As reported in February 2013, recent studies carried out by Sareum sought to differentiate the two most promising programme compounds. Whilst both molecules demonstrate similar efficacy in disease models, the preclinical candidate shows clear benefits in safety models and predicted human exposure, based on a number of in vitro assays. The focus of the programme remains the treatment of AML, but both compounds also demonstrated potent cell-killing activity against other cancers, particularly Acute Lymphoblastic Leukaemia (ALL), Neuroblastoma and Anaplastic Large-Cell Lymphoma. Further investigation of the candidate in additional disease models will be carried out during preclinical development.

Scancell Holdings (LON: SCLP 24p/£46.67m)

Scancell Holdings was informed on 11 July 2013 that one of the three patients recruited into the higher 8mg dose study of SCIB1 will no longer be eligible for evaluation due to delivery of an incomplete dose of SCIB1 following a fault with the electroporation device for that patient. Scancell will recruit a replacement patient as soon as possible in order to complete the initial phase of the 8mg study which is to assess the safety and immune response produced by the 8mg dose prior to expanding the study to include a further ten patients as planned. The initial part of the study is now expected to be completed early next year.

Sinclair Pharma (LON: SPH 25.0p/£108.73m)

Sinclair IS Pharma announced a trading update for the twelve months ended 30 June 2013 ahead of its full year results. Revenues for the full year accumulated to £55.4m, which includes a six month contribution by Sculptra(R). Revenue growth for the full year is eight per cent on a reported basis and four per cent on a like-for-like basis with dermatology brands making up eighty per cent of group sales. A five per cent like-for-like decline in growth in the group’s five EU Country operations was a result of non-core brands such as Variquel(R) and Cryogesic(R), contrasting a substantial twenty per cent like-for-like advance in international operations. The Group’s core five EU Country operations benefited from the successful launch of Sculptra(R) and the continuing growth of Kelo-cote(R). New teams dedicated to aesthetic sales and marketing across Europe have been deployed, resulting in significantly improved brand awareness and retraining of Sculptra(R) practitioners. This has resulted in a marked turnaround with sales now running ahead of the comparable period last year, with Sculptra(R) and Succeev(R) contributing revenues of £4.2m in the period to 30 June 2013. Leading brand Kelo-cote(R) has also benefited from dedicated European aesthetic sales forces showing eight per cent like-for-like growth in Europe over the year. Variquel(R) and Cryogesic(R) have continued to be affected by the combination of generic competition and alternative presentations, with Variquel(R) revenues stabilising in the second half and dropping 25 per cent for the full year. International revenues were again driven by excellent growth both in Asia of 37 per cent like-for-like, and MENA 27 per cent like-for-like. Heavy investment in Atopiclair(R) and Papulex(R) by Menarini Asia has driven sales in eleven Asian countries. Menarini Asia has supplemented the success of Kelo-cote(R) in China and South Korea by launching Kelo-stretch(R) as Glyderm(R) in Indonesia, Thailand, and Taiwan. The collaboration with Hikma Pharmaceuticals to commercialise Flammacerium(R) in eighteen MENA countries further underlines the importance of the region to the group’s growth plans. The Group completed the most significant legacy restructuring issue facing the group by successfully exiting all in-house manufacturing in June 2013. Net debt at 30 June 2013 was reduced to £6.8m due to a strong improvement in operating cash flow, from 30 June 2012 which was £9.1m.

Sprue Aegis (LON: SPRP 98.5p/£38.80m)

Sprue, one of Europe’s leading home safety products suppliers, issued a pre-close trading update ahead of its unaudited interim results for the six months ended 30 June 2013, which will be announced on Tuesday 24 September 2013. 2013 has seen Sprue’s strongest ever trading start to a year, reflected in sales expected to be reported in the first half of the year of £21.4m, up 28 per cent on the same period last year (H1 2012: £16.7m). Sales have benefitted from significant contracts awarded in the second half of last year, including B&Q, British Gas and Baxi which is part of BDR Thermea, one of Europe’s largest boiler manufacturers. In addition, Continental Europe has also seen strong demand largely on the back of higher sales of the Group’s award winning ST-620 Thermotek smoke alarm. As expected, the gross margin has declined slightly compared to H1 2012 principally due to changes in the sales mix although the operating profit is expected to be significantly higher than H1 2012, benefiting from operational leverage and tight control over fixed costs. The Company’s forward order book has never been so strong and Sprue remains on course to deliver results for the year that are in line with market expectations.

UBC Media Group (LON: UBC 2.25p/£4.48m)

Pursuant to the authority given to the Company by shareholders at its Annual General Meeting on 26 July 2012, UBC announces that on 9 July 2013 it purchased 5,000,000 ordinary shares of 1 penny each in the Company at a price of 2 pence per Ordinary Share. The purchased Ordinary Shares will be held in treasury. Following this transaction, the Company’s total issued share capital will remain unchanged with 206,619,545 Ordinary Shares in issue. There will be 7,696,004 shares held in Treasury.

*A corporate client of Hybridan LLP

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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.

9th July 2013

This week: Wins for 32Red and Netplay and Contracts for Driver, blur and Prometic

The upward trend in major stock indices accelerated last week, with the FTSE 100 climbing 166 points to 6,374 and even the recently subdued AIM All share index managing to gain 10 points to 792. A fresh impetus was provided by the MPC which held rates unchanged at 0.5 per cent for the 53rd consecutive month and indicated that the committee may use expansionary policy in the coming months. Meanwhile, the ECB also held rates unchanged and gave unprecedented forward guidance that rates will remain low for an extended period of time. Even a strong reading of US jobs created in June has failed to dampen the enthusiasm for equities so far this week. Most sectors are gaining, however, high beta banks and mining sectors are now outperforming. Further gains may depend on how markets react to the minutes from Jun 18-19 FOMC meeting which are released tomorrow or to a speech by Mr. Bernanke in Boston also due tomorrow. On Thursday, investors will have to contend with US Initial Jobless Claims to gauge the strength of the US economy and what this may mean for Fed’s monetary policy.

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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.

TTR Award of Costs; AGL Parsortix Results; AYM Operating and Audited Financial Results; BLUR Contract Win & Update; CAMK Trading Statement; CEY Production Results; CWR Directorate Change; CNR Drilling Programme Updates; DEMG St Thomas’s Results; DRV Contract Win; ESG HomeSend Launches Services to Telesom; GWP Sativex(R) Launch in Italy; HIK Trading Statement; IDEA Acquisition; ITM Trading Update; JWNG Preliminary Numbers; MWA Funding Update; NETD Business Update; NPT Trading Update; PLI Licensing and Long-Term Supply Agreement; SCLP Placing, Open Offer & Results; SOLG Final Report for Environmental Permit; SUMM Placing.

32Red (LON:TTR 54.5p/£39m)

32Red, the online casino operator, has announced that following a hearing held before the High Court on 10 June 2013, a costs order has now been made in 32Red’s favour in respect of its trade mark action against members of the William Hill Group. Along with the damages award itself, 32Red expects to receive payment of approximately £1.1m from William Hill. William Hill have made an interim payment of £0.8m and the balance (plus interest) will be due once the precise amount has been determined in an assessment. This award marks the end of four years of litigation that has seen all of 32Red’s trade marks validated in the High Court and the removal of an infringing site from the market. The Board has also approved a special dividend of 2.5p per share.

Angle (LON:AGL 59.5p/£26.9m)

The specialist medtech company announced successful results from third party testing of its Parsortix non-invasive cancer diagnostic product on colorectal cancer patient blood. Following a number of successful separations of the blood of patients with a variety of different cancers, Surrey has completed a structured analysis of colorectal cancer patient blood undertaken by a hepatopancreobiliary surgeon from the Royal Surrey County Hospital. Cells from 2ml samples of whole blood from 20 colorectal cancer patients were separated and harvested using the Parsortix system. The harvested cells were investigated by Surrey to identify and count the CTCs (circulating tumour cells) in the patients’ blood. Of the 20 patients tested, 75 per cent were found positive for CTCs. This is a promising result as it is more than double the level recorded in the published literature, which suggests that a positive CTC count (defined as 2 or more CTCs in 7.5ml of blood) will be found in less than half this number of patients. The effectiveness of the Parsortix cell harvest is even more pronounced as only 2ml of blood was used, less than one third of the sample volume used in the published studies. Surrey has subsequently demonstrated that, through the use of the simple and established Ficoll gradient process as a pre-separation enrichment step, the Parsortix system is capable of running much larger blood volumes fast and effectively through the system without reducing the capture and harvest capabilities of the system. Using this approach, a 20ml patient blood sample can now be processed through the Parsortix system in under an hour. Given the scale and severity of colorectal cancer, it is a major target for the Parsortix system.

Anglesey Mining (LON:AYM 6.75p / £10.85 m)

Anglesey Mining holds 15.3 per cent of Toronto-listed Labrador Iron Mines Holding Limited (TSX:LIM) which is producing high grade hematite from its James pit; one of LIM’s direct shipping iron ore deposits in Western Labrador and north-eastern Quebec. Exploration and development is being carried out at Parys Mountain, owned entirely by Anglesey. Parys Mountain is a zinc-copper-lead deposit in North Wales where a JORC Code-compliant resource of 2.1mt at 6.9 per cent combined base metals in the indicated category and 4.1mt at 5.0 per cent combined in the inferred category was published in November 2012. Anglesey Mining announced its operating and audited financial results for the fiscal year ended March 31 2013 for its 15 per cent held associate, Labrador Iron Mines Limited. Canada’s Labrador Iron Mines has a portfolio of direct shipping (DSO) iron ore operations and projects located in the prolific Labrador Trough. LIM commenced its third season of operations in April 2013 with the restart of full-scale mining activities targeting 1.75m to 2.0m tonnes of saleable iron ore production in 2013. For the fiscal year ended March 31, 2013, LIM reported a loss of $129.7m or $1.56 per share, resulting primarily from an operating loss (before depletion and depreciation) of $28.9m, a depletion and depreciation charge of $29.7m and write-downs totaling $61.2m comprising a write-down of mineral property interests of $58.1m and a $3.1m provision against certain doubtful receivables.

blur (Group) (LON:BLUR 219p/£65.0m)

blur (Group) announced the submission of a $3.6m project onto the Exchange. This is the largest project received to date and is for the delivery of an advertising and marketing campaign to support the national roll out of a new product for a US transportation group. The Company also reported continued success with strong growth in all its core metrics for Q2. The quarter saw the launch of version 3.0 of its s-commerce platform, proving scalability of this release with significant growth in both volume and values. There was 125 per cent y-o-y growth in number of new projects, a 315 per cent y-o-y growth in total value of projects submitted and a 110 per cent y-o-y growth in average project value during the quarter. Approximately 1,000 new businesses are currently adopting s-commerce on blur Group’s Exchange each month which is a marked acceleration. Philip Letts, CEO blur Group commented: “This quarter was one of the most satisfying to date, with the launch of blur 3.0 being an absolute highlight as it is the foundation for future scalability and growth. We’re used to seeing growth in core metrics, but this quarter wasn’t just marked by the continued growth in businesses using the Exchange, but also in the rapid increase in the size of the initial projects and the budget commitments of those services buyers who are becoming platform buyers. At the end of the quarter we reached the point where 1,000 new businesses are adopting our s-commerce platform each month. The confidence of the public investors was especially pleasing for our secondary placing and these metrics, and our continuing growth reinforces our first-mover advantage in the $2tn s-commerce market, rewarding that support.”

Camkids (LON:CAMK 117p/£88.25m)

The Board of Camkids has said that trading across the Group’s stores is going well and that trading across all of the Group’s divisions continues to be in line with market expectations for the current financial year. The Group recently held a successful sales fair to showcase its autumn / winter 2013 collection to distributors and the Board confirms that following this sales fair, Camkids’ order book is up by 19 per cent compared with the same period last year. The Group continues to focus on increasing the number of Camkids branded stores in China through its network of distributors, and this has increased to a total of 1,193 stores. In particular, the Group recently appointed a new distributor and now has a presence in Shanghai with a total of five stores there. This represents an important milestone for the Group and a further deployment of the funds raised at the time of the Group’s admission to AIM in December 2012 in accordance with the Group’s stated use of proceeds at that time. This follows the Group’s announcement on 28 May 2012 that the Group’s fifth production line is now fully operational. The Board has said that this increased manufacturing capacity is enabling further growth.

Centamin (LON:CEY 39.5p / £433.68m)

Centamin announced preliminary production results from its Sukari Gold Mine in Egypt for the quarter ended 30 June 2013. Total gold production was at an increase of 39 per cent on the corresponding quarter in 2012 at 93,624 ounces, and 8 per cent higher than Q1 2013. Formal guidance for the current year was provided on 14 March 2013 and remains at 320,000 ounces gold at a cash operating cost of US$700 per ounce. An increase of 4 per cent in open pit material movement between Q1 2013 to 11,019kt was observed along with an increase in 39 per cent in open ore production on Q1 2013 to 2,961kt. This led to an increase in the run of mine ore stockpile balance of 432kt to 1,191kt at the end of the period. The underground mine was up 19 per cent on Q1 2013, delivering 142kt. A record 1,418kt was recorded at the Sukari process plant, a 12 per cent increase on the prior year period and a 1 per cent increase on Q1 2013. These figures exceeded the annualised rate of 5m tonnes for the second successive quarter and were primarily driven by continued high levels of productivity and availability of the processing plant.

Ceres Power Holdings (LON:CWR 8.845p/£47.5m)

Centamin announced preliminary production results from its Sukari Gold Mine in Egypt for the quarter ended 30 June 2013. Total gold production was at an increase of 39 per cent on the corresponding quarter in 2012 at 93,624 ounces, and 8 per cent higher than Q1 2013. Formal guidance for the current year was provided on 14 March 2013 and remains at 320,000 ounces gold at a cash operating cost of US$700 per ounce. An increase of 4 per cent in open pit material movement between Q1 2013 to 11,019kt was observed along with an increase in 39 per cent in open ore production on Q1 2013 to 2,961kt. This led to an increase in the run of mine ore stockpile balance of 432kt to 1,191kt at the end of the period. The underground mine was up 19 per cent on Q1 2013, delivering 142kt. A record 1,418kt was recorded at the Sukari process plant, a 12 per cent increase on the prior year period and a 1 per cent increase on Q1 2013. These figures exceeded the annualised rate of 5m tonnes for the second successive quarter and were primarily driven by continued high levels of productivity and availability of the processing plant.

Condor Gold (LON:CNR 92.5p / £35.05m)

Ceres Power, a developer of clean, efficient, cost-effective fuel cell technology, announced the appointment of Philip Caldwell as Chief Executive Officer with effect from 2 September 2013. Phil is currently Corporate Development Director at Intelligent Energy Limited, a rapidly growing privately-owned global company that specialises in the development of PEM fuel cell systems across multiple markets, where he has overseen revenue growth from £1.5m to c. £44m over the past six years. In his role at Intelligent Energy, Phil is responsible for leading commercial and strategic business development activities in the automotive, stationary power and consumer electronics markets. He has a strong track record of securing OEM partners, executing licence deals and development agreements with sector-leading global companies. In particular, he was instrumental in establishing a joint venture with Suzuki Motor Corporation enabling manufacture of fuel cells under license in Japan. Steve Callaghan, who has assisted the Company during the restructuring and turnaround phase, shall remain a Non-Executive Director and, as part of his on-going role, will support Phil as required.

Deltex Medical Group (LON:DEMG 17.75p/£29.2m)

The global leader in oesophageal Doppler monitoring (ODM) has announced that doctors from St Thomas’s hospital in London have presented positive results from the first trial to use CardioQ-ODM after major surgery in awake patients. 84 higher risk patients undergoing major elective colorectal surgery within an established enhanced recovery programme, with planned post-operative critical care admission, were included in the trial. Both study and control groups had their vascular fluids managed intra-operatively with CardioQ-ODM and the study group had their fluids managed using ODM for stroke volume optimisation for a further sixteen hours post-operatively. The post-operative ODM group was found to benefit from earlier return of gastro-intestinal function (two days vs. four days) and had two day shorter lengths of hospital stay (11 days vs. 13 days). Since the start of 2013, the anaesthetists at St Thomas’s have agreed and implemented fluid management protocols for certain types of major surgery as a result of which, use of CardioQ-ODM probes has increased from around 55 patients a months to over 120 patients a month. Ewan Phillips, Deltex Medical’s Chief Executive, commented: “These are excellent results from a world renowned London Teaching Hospital… and confirms the benefits of ODM within an established enhanced recovery programme; and it shows the clinical utility and effectiveness of ODM in awake patients. The growth in use of our products at St Thomas’s Hospital so far in 2013 means it has become one of our largest UK customers. It was one of the first hospitals to install our new CardioQ-ODM+ monitors in its operating theatres, as well as the first UK hospital in which we have formally implemented our dedicated trainer programme.”

Driver Group (LON:DRV 94p/£24.8m)

Driver Group, the global construction consultancy to the construction and engineering industries, announced continued progress in the Company’s Oil & Gas business with the award of a contract for the provision of commercial and cost planning services to JP Kenny Caledonia Ltd and its affiliates. JP Kenny is part of the Wood Group, a leading international energy services company with $6.8bn of sales and operating in fifty countries. The duration of the contract, which covers all of the Wood Group of companies, is for an initial period of three years with provision for this to be extended to four years. The services to be provided by the Driver Group extends to pre-bid and measurement services, strategic project guidance, contract advisory, cost and contract risk, planning and schedule management. Dave Webster, CEO of Driver Group said: “This contract win is a positive endorsement of the Company’s focus in developing its Oil & Gas business, particularly with the creation of a role as Head of Oil & Gas for Europe operating from our recently opened Aberdeen office. We will be able to service JP Kenny and Wood Group from our network of international offices particularly Aberdeen, Houston, Kuala Lumpur, Singapore, Brisbane and our 4 Middle East offices. We are delighted by the trust shown in our Company by such a prestigious business and look forward to serving them well over the next 3 years and beyond. This contract will further enhance the performance of the Houston and Brisbane offices where we have currently secured a number of additional projects in the Oil & Gas sector”.

eServ Global (LON:ESG 25p/£61m)

eServGlobal, the telecoms software vendor specialising in Mobile Money and Value-Added Services and its strategic business partner, BICS, a provider of international carrier services, have launched HomeSend remittance services to Telesom, the leading mobile network operator in Somaliland. Telesom operates a successful mobile money program in Somaliland called Telesom ZAAD. Launched in 2009, Telesom ZAAD quickly gained traction and is currently used by over 40 per cent of Telesom’s customers. Telesom ZAAD is one of the 14 GSMA Mobile Money Sprinters and is recognised as one of the most successful mobile money services in the world. The launch of remittance services with HomeSend will enable Telesom ZAAD users to receive money transfers sent directly to their mobile wallets from their family overseas.

GW Pharmaceuticals (LON:GWP 48.625p/£86.3m)

GW Pharmaceuticals notes the announcement from its partner Almirall S.A. that Sativex(R) is now available in Italy as a prescription medicine for use in the treatment of moderate to severe spasticity in Multiple Sclerosis (MS) patients who have not responded adequately to other anti-spasticity medications. The launch follows receipt of full marketing authorisation for Sativex(R) by the Italian health authorities in May. The medicine is reimbursed by the Italian authorities as a Class H (hospital dispensed) medicine. The reimbursed price of the medicine granted by the authorities in Italy is consistent with the reimbursed Sativex(R) price in Spain. Justin Gover, Chief Executive Officer of GW said: “With a total of 21 countries that have now approved Sativex(R) for use in the treatment of MS spasticity, and a further 9 countries in which regulatory submissions are ongoing, we look forward to a series of further commercial launches over the coming twelve months.”

Hikma Pharmaceuticals (LON:HIK 1071.5p/£2.1bn)

Hikma issued a trading statement and said that since issuing its Interim Management Statement on 16 May 2013, all of its businesses have continued to perform well. Its Generics business has continued to benefit from strong doxycycline sales. Hikma has remained focused on the remediation of the Eatontown facility and is slowly reintroducing products to the market. Hikma’s Branded business remains on track to meet its current full year guidance, of around 9 per cent revenue growth (11 per cent in constant currency), with adjusted operating margin in line with 2012. Due to the timing of shipments, Branded revenue growth is expected to be stronger in the second half of the year. The Injectables business has continued to perform well, driven by strong performances in the US and Europe. Hikma is also seeing good demand for products in the MENA region, where it has won some key tenders. Hikma expects these tenders will drive MENA revenue growth in the second half of the year. Hikma continues to expect the global Injectables business to deliver low double digit revenue growth for the full year. Overall, Hikma now expects Group revenue to grow by around 17 per cent in 2013, up from previous guidance of around 13 per cent.

Ideagen (LON:IDEA 19p/£23.1m))

Ideagen announced that it has acquired MSS Management Systems Services Ltd (MSS), the developer and owner of ‘Patient First’, an Information Management Solution which supports the everyday practices of NHS Accident & Emergency (A&E) departments. Patient First provides the end user with an intuitive application that delivers real-time clinical management of patients in the acute and minor injuries environment whilst supporting the delivery of the complex information needs of NHS Trusts. There is a growing need to improve data collection and clinical processes within A&E departments to support KPIs and national quality standards. Patient First will be integrated into Ideagen’s existing E-Casenote and Order Communications solutions to provide a robust and scalable platform with access to real time information showing where a patient is and future requirements for the A&E department and NHS Trust. The initial net cash consideration for the acquisition of MSS is £589k with a further £50k deferred for 12 months. Additionally, up to a further £540k cash may be payable on certain revenue targets being achieved in the period to 30 April 2014. The maximum amount would be payable on revenues achieved in the 10 month period to 30 April 2014 of £1.5m. The acquisition will be funded from Ideagen’s cash resources and will be immediately earnings enhancing. David Hornsby Chief Executive said: “With total attendances at hospital A&E units in England having risen every year for the past eight years, medical organisations have voiced concern about what they believe is an unsustainable rise in attendances and admissions. Ideagen has identified that emergency care services need more robust systems to manage this increased workload. Patient First, together with our existing NHS Information Management software, will enable us to help deliver the transformation required.”

ITM Power (LON:ITM 40p/£47m)

ITM Power, the energy storage and clean fuel company, has reported that while it has made significant progress toward the full commercialisation of its technology this has not yet fed through to meaningful revenues due to delays in the delivery and commissioning of plant at customer premises where the customer has not been ready to accept delivery of ITM’s products. As a result, revenues for the financial year to 30 April 2013 were significantly lower than expected. While the Company is continuing to develop its key markets in Germany and the USA, delivery times and hydrogen plant deployment is slipping and the company does not now see the commercial recognition, and therefore revenues, of significant deployment until the financial year 2015. In the Power-to-Gas energy storage sector, the Company’s 360kW plant for the Thüga Group in Germany will lead a commercial campaign in Europe. The Thüga Group has now started construction of a pilot plant in Frankfurt and over the course of a three-year operation 13 Thüga partners are expected to test ITM’s power-to-gas storage technology using the gas distribution network.

Jaywing (LON:JWNG 10p/£7.5m)

Jaywing this morning reported its preliminary numbers for the year ended 31st March 2013. It reported a gross profit of £30.08m (2012: £29.75m), EBITDA before other income of £3.01m (2012: £3.60m) and a profit before tax of £1.03m (2012: £1.27m). The profit after tax figure came in at £0.63m (2012: £1.12m) and the company has net debt of £2.32m (2012: £3.17m), un drawn banking facilities of £2.48m. Commenting on the results, Chairman Andrew Wilson said: “These are acceptable results. The year was difficult and we spent time and effort restructuring the business sometimes to the detriment of seeking out new clients and opportunities. However, Martin Boddy and Andy Gardner are slowly but surely creating a business of real substance built on solid foundations. Most importantly we are seeing the results of their efforts reflected in the enthusiasm of our people. This in turn is leading to applause and positive commentary from our clients. Change does take time and the shareholders have borne the result of a long period during which demand has been depressed and we were frankly poor in responding to a rapidly changing marketplace. I believe that we now have a business capable of succeeding and I look forward to this being reflected in the share price.”

Mwana Africa (LON:MWA 1.44p/£16m)

Mwana Africa, the multi-commodity mining and development company with operations in Zimbabwe, the DRC and South Africa, has announced that several funding options are being actively considered by the Board and include, amongst others, an equity placing and funding at project level. This follows the update of 24 June 2013, when the company reported that its nickel subsidiary, BNC, has so far been unable to raise additional funding through debt to finance phase two of the restart of Trojan Mine as had been anticipated at the time of the September 2012 rights offer and private placement by BNC. Additionally, whilst Freda Rebecca, its gold mine in Zimbabwe, remains cash generative, its cash contribution to the group in recent months has fallen in light of lower gold prices. The company has embarked on a significant cost cutting exercise targeting annualised savings from budgeted corporate costs of around US$5m, and is considering its strategic options in relation to its assets and projects including BNC and Zani Kodo, its gold project in DRC.

NetDimensions (LON:NETD 46.25p/£17m)

NetDimensions, the provider of performance, knowledge and learning management systems, has reported that in the period to 30 June 2013 GAAP revenue was in line with management expectations and the adjusted loss before tax will be smaller than forecast. Following on from the successful US$6m placing of new shares and the announcement made on 22 May 2013 outlining the investment plan to substantially grow sales revenues, the management has reported that the implementation of the plan is gathering pace. One of the key elements to the growth is the recruitment of additional sales quota carrying staff and as at 30 June 2013 the Company had filled 75 per cent of the new quota carrying positions, bringing the total to 29, an increase of 71 per cent from the beginning of the period. The company is also in advanced discussions to take on additional office space in Hong Kong and Atlanta to support the expanding operations in these locations.

Netplay TV (LON:NPT 17.375p/£50.5m)

NetPlay TV, the interactive gaming company, gave a trading update. The company has continued to increase investment in pure online marketing in addition to its core TV marketing. This strategy has delivered robust quarterly and half yearly year-on-year core Key Performance Indicators. The company reports a cumulative 31 per cent increase in half-yearly new depositing casino players to 32,618 (H1 2012: 24,948) and cumulative half year-on-year net revenue growth of 36 per cent. Following an exceptionally strong Q1, and as seasonally expected, new depositing casino players decreased 16 per cent against Q1 2013, active depositing casino players decreased 7 per cent however total net revenue increased by 1 per cent on Q1 2013. The directors are pleased with this continued strong performance and are confident of meeting full year market expectations. The Company expects to issue its interim results on 10 September 2013. There was a 34 per cent increase in total net revenue to £7.1m (Q2 2012: £5.3m)

Prometic Life Sciences (TSX:PLI 0.325c/CAD159.5m)*

ProMetic Life Sciences announced that it has entered into a licensing and long-term affinity resin supply agreement with one of its existing clients, a global leader in the biotherapeutics industry. This agreement follows the successful development and scale-up of a new affinity resin specifically designed to enhance the quality and purity of an existing biopharmaceutical product manufactured in multi-ton quantities. The signing of this agreement signifies the commencement of commercial supply of the new affinity resin for use in production of the biopharmaceutical product. The overall demand for this affinity resin is expected to grow significantly as the purification process incorporating the new affinity resin is rolled-out across the client’s global manufacturing sites for its biopharmaceutical product. Total revenues arising from the new resin are expected to ramp up quickly to exceed $6.0m on an annual basis.”We are very pleased to have met and exceeded our client’s performance targets once more and delivered a new affinity adsorbent on-time and within budget, as demonstrated by the recently completed scale-up of the affinity resin”, said Dr. Steve Burton, Chief Executive Officer of ProMetic BioSciences Ltd. “The superior product quality and purity profile derived from the utilization of ProMetic’s affinity technology places our client in a position to increase its respective market share” added Dr Burton.

Scancell Holdings (LON:SCLP 30p/£58.3m)

Scancell Holdings, the developer of novel immunotherapies for the treatment of cancer, announced a conditional firm placing and open offer to raise up to £6.5m at a 55 per cent discount to the closing price on 7 July 2013. This will enable the Company to commence work on the pre-clinical development of the first Moditope(TM) immunotherapy product, provide working capital for the completion of the Phase 1/2 SCIB1 clinical trial and for the recruitment of a further ten patients on the 8mg dose. As previously announced, the company expects to report the preliminary results of the Phase 1/2 trial (excluding the patients on the 8mg dose) by the end of 2013. A conditional firm placing at 22.5 pence to raise gross funds of approximately £4.5m, has been arranged with investors in various EIS and VCT funds managed by Calculus Capital. In addition, there is a proposed open offer to raise up to £2.0m from qualifying shareholders. The company reported progress on all fronts in its final results for the year ended 30 April 2013. In particular: there was a successful completion of Part 1 of the SCIB1 Phase 1/2 clinical trial; part 2 of the SCIB1 Phase 1/2 clinical trial is fully recruited and on track for completion by the end of 2013; an additional 8mg dose study is underway, also expected to be completed by the end of 2013 and the development of the new Moditope(TM) platform.

SolGold (LON:SOLG 4.175p / £23.6m)

SolGold, a gold miner focusing in Northern Ecuador, Australia and the Solomon Islands, has said on Monday that additional assay results at its Cascabel Project in Ecuador have returned higher than expected copper and gold grades. These additional assay results have been received from 67 individual channel samples that were collected from three local areas at higher elevation to the northeast, east and south-southeast of the mineralised outcrops of the key Alpala target. The recent phase of surface sampling at Alpala were from higher in the silica-clay lithocap where copper and gold grades were expected to be lower in this final batch of assay results, confirming the SolGold model that copper and gold grades increase with depth in the system. The Ministry of Environment received the Final Report for the Environmental Permit or EIA (Estudio de Impacto Ambiental), submitted on May 31st, which is it now progressing through the final stages. The feedback from The Ministry of Environment personnel is that there are some minor issues that still need to be addressed by the report. SolGold has responded to this by engaging its environmental consultants, Cardno Latino America, to assist with addressing these last remaining issues. Mobilisation is progressing for the Stage 1 drilling program, and it is expected that mobilisation of the drilling and other associated equipment will be completed in mid-July.

Stadium Group (LON:SDM 35.5p/£10m)

Stadium Group, the electronic technologies group, has provided a pre-close trading update for the six months ending June 2013. Trading in the first half of the year has continued to be challenging, particularly in iEMS where margins have remained under pressure. As yet there is no sign of any easing of the margin pressures being experienced in this business. In order to fulfil customer orders and enable a more controlled transition to a single UK iEMS site at Hartlepool, it has been decided that the closure of the Rugby facility, previously scheduled to take place at the end of June, will be delayed by a maximum of three months. This will mean that some of the cost benefits arising from the closure will now not be seen until the final quarter of the current financial year. The rationalisation of iEMS manufacturing onto one site in the UK is ultimately expected to yield cost savings of c£1m per annum. IGT has delivered consistently positive growth since the start of 2013 and continues to trade well. The power supplies business continues to perform in line with expectations. However, as a consequence of the issues in the iEMS business, the management is anticipating that full year results will be significantly below market expectations.

Summit Corporation (LON:SUMM 4.65p/£16.5m)*

Summit announced a share issue to raise £4.5m through the issue of shares by way of a placing at 5.0 pence per share to certain institutional investors and directors. The issue price represents a premium of approximately 17.6 per cent to the price of 4.25 pence per share, being the closing mid-market price of the Company’s shares on 2 July 2013. Glyn Edwards, Chief Executive Officer of Summit commented: “We are pleased to have received the support of existing shareholders and experienced healthcare investors in this placing that will maintain the development of our DMD programme while our novel C. difficile antibiotic continues to be supported by the Wellcome Trust.” Qualifying shareholders will also be given an opportunity to participate in an offer for subscription of shares at 5.0 pence per new share to raise up to £1.0m in addition to the funds raised from the placing.

*A corporate client of Hybridan LLP

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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.

2nd July 2013

This week: Cambridge Cogs gear up ,  Water Hall hoists Petard and Plethora partner potential

The major stock indices around the world recovered last week, with the FTSE 100 climbing 91 points to 6,208. However, the resources-heavy AIM All share continued to lose ground, falling 5 points to 692. The UK Industrial Metals & Minerals index fell by 10.6 per cent reflecting the continuing downward pressure on commodity markets. However, defensive sectors such as life insurers, household goods and pharma continued to be in demand as central banks tried to reassure investors that they would not press too greatly to curb easy credit or quantitative easing. The recovery has continued so far this week with positive manufacturing news – US ISM manufacturing in June rebounded from last month, Chinese data showed activity continuing to expand while UK  activity jumped, coming in well ahead of expectations. The economic calendar in the remainder of the week is dominated by Initial Jobless Claims, ADP Employment Change and Nonfarm Payrolls in the US and interest rate decisions in the Euro Area and 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.

ABDP first order since IPO; BGO Microsoft’s Windows Phone Store in Indonesia; BLUR New R&D Centre; COG update on CANTABmobile™;CMH Board appointment; EKT Trading update; IVO EIB loan; INS Contract Win; JDG Acquisition and trading update; MSG half year report; OXB Glaucoma-GT update; PEG Offer for Water Hall Group;PLE AGM & Regulatory Update; POS New POS-GRIP Customer; PGR Convertible loan; TAN Final Results; TCN Chinese Joint Venture; TYR Final results; UBC Rightster Contract; XEN US appointment

AB Dynamics (LON:ABDP 120.5p / £19.65m )

The designer, manufacturer and supplier of automotive testing systems, has announced its first orders since listing on AIM in May 2013.MIRA has confirmed an order for a new four wheel Suspension Parameter Measurement Machine whose contract value depends on the options purchased; it is typically more than £1.5m. This is the third of three recent SPMM orders that will contribute to the Company’s budgeted turnover for the next financial year commencing on 1 September 2013. MIRA is a long term repeat customer having purchased the Company’s first SPMM in 1995. The new rig represents a significant upgrade in performance when compared to the 1995 model. ABD has received its first order for its latest guided soft crash target vehicle for approximately £400,000 which is expected to be recognised in the next financial year ending 31 August 2014.

Bango (LON:BGO 185p / £84.23m)

Bango, the mobile web payments and analytics company, announced that it has launched direct operator billing for Microsoft’s Windows Phone Store (NASDAQ: MSFT) in Indonesia with the Mobile Network Operator (MNO) Indosat (IDX:ISAT, NYSE:IIT), a leading MNO with approximately 50 million mobile subscribers and a subsidiary of Qtel Group. Windows Phone users on the Indosat network are now able to purchase digital content through one-click operator billing.  The Indonesian smartphone market is seeing rapid growth, with the research firm GfK reporting a 37 per cent increase in the year to March 2013, and overall volume sales of 15.8m units. Bango continues to work with Microsoft to expand operator billing in the Windows Phone Store and expects to announce further progress in the coming months. The Board believes it is too early to accurately forecast the level of business which may be generated. Microsoft has partnered with Bango for the launch of operator billing in Indonesia due to the depth and quality of Bango’s existing operator connections across a range of app stores and operators. Bango powers mobile payment for a number of the world’s leading app stores. Bango recently announced it had reached 110 mobile operator connections globally, and a reach of more than one billion mobile subscribers. Bango’s launch in Indonesia is part of a broader strategy to focus on fast-growing emerging markets, which could benefit most from operator billing (as credit card use is less prevalent in these markets), where the operational challenges are greater and Bango can demonstrate its technology leadership. Earlier this year Bango strengthened its balance sheet with new investment, principally to support its growth in these emerging markets.

blur Group (LON:BLUR 179.5p/£52m) 

blur Group, the technology company that is seeking to fundamentally reinvent commerce through its Global Services Exchange, has announced that it is setting up a new R&D Centre in Exeter. This move shows a commitment to the South West region which has four of the country’s top twenty universities, a track record in innovation and entrepreneurship, where start-ups have attracted more than $550m in investment and returned more than $800m to shareholders and is in a prime position to become the UK’s leading tech region. The Company has also announced the appointment to the Board of James Davis as Group CFO, to be effective as of 29 July 2013. Most recently Mr Davis was CFO of Four Cross Media, a network of businesses in the USA, India and Singapore that was established in 2010 to marry the best of Western and Asian know-how in the media services space. Previously, he was also CFO of Sporting Index, the online sports gaming group.

Cambridge Cognition Holdings (LON:COG 81p / £13.68m)

Cambridge Cognition Holdings, which specialises in computerised neuropsychological tests including those enabling the early detection of dementia, provided an update on its CANTABmobile™ product after the Company’s admission to AIM on 18 April 2013. CANTABmobile is an approved CE-marked Class II medical device, which addresses the need to rapidly detect early memory loss or signs of cognitive impairment. The product, which runs on an iPad, is targeted at mainstream primary healthcare markets and is based on tests previously only available, through the Company’s other product offerings, to pharmaceutical companies and academia for specialist trials and research. Guildford and Waverley CCG is the latest clinical commissioning group (CCG) to roll out CANTABmobile into GP practices, whilst trials of CANTABmobile continue with over 60 CCGs around the UK. Currently CANTABmobile™ has 16 customers, including 6 CCGs, as well as a number of private healthcare groups and a pharmacy chain, each in the UK, and a clinical centre in Germany. Ongoing trials with CCGs are expected to convert into licence sales in the coming months as a dedicated sales and marketing function is established for CANTABmobile, and discussions continue with a number of possible channel partners to help accelerate the adoption of CANTABmobile™ in the UK and beyond. The build-up of this sales and marketing function continues in line with expectations, with four new sales hires joining shortly, and the Company looks forward to appointing a senior sales manager in due course. The Company anticipates that the benefit of this investment will be seen as it enters the second half of the financial year.

Chamberlin (LON:CMH 88p/£12m) 

Chamberlin, the specialist foundry and engineering group, has announced the appointment of David Roberts to the Board as Finance Director, with effect from 1 September 2013. Mr Roberts, aged 44 years, has substantial experience in senior financial roles within the manufacturing and engineering sectors. He joins from Titanium Metals Corporation, a global producer of titanium melted and mill products, where he has held the role of European Finance Director since 2001. Before TIMET, he worked for Britax International plc for six years as Divisional Finance Director of Rear Vision Systems, a supplier of original equipment exterior mirrors for passenger cars and light trucks to automotive manufacturers worldwide. He is a fellow of the Institute of Chartered Accountants in England and Wales and qualified as an accountant with Ernst & Young.

Elektron (LON:EKT 13p/£16m) 

Elektron Technology, the global technology group, has issued a trading update for orders and sales in the four months ended 31 May 2013. Demand for the Company’s products remains encouraging, with order intake above management expectations and in line with the comparable period in the prior year. However, sales are lagging behind orders due to production delays following two factory relocations, with year-to-date sales from continuing operations 11 per cent lower than in the comparable period in the prior year. As a consequence, half year revenue and cashflow will be below expectations. The Company has also incurred unplanned exceptional costs in order to support production.

Imperial Innovations (LON:IVO 322p/£312m) 

Imperial Innovations Group, the technology commercialisation and investment company, has obtained a loan for a period of 12 years from the European Investment Bank (EIB) to invest in the biotech and therapeutics sectors. The loan facility amounts to £30m and will be made in two tranches of £15m. The Group plans to draw down the first tranche shortly. The funding is additional to Innovations’ existing cash resources, which at the last published accounts in January 2013 amounted to over £60m. It will enable the Group to increase the rate and scale of its investment in both new technologies and existing portfolio companies in this space.

Instem (LON:INS 133p / £15.65m)

Instem, the provider of IT applications to the global early development healthcare market, announced its first contract win for its newly acquired ALPHADAS software. The contract consists of a high six-figure £ perpetual licence plus implementation services, with ongoing annual support and maintenance. Phil Reason, CEO of Instem plc, commented: “We are delighted to be able to announce a significant contract win for Instem Clinical, so quickly after it was established following the acquisition of Logos in May this year. A leader in their field and experiencing significant growth, the new client is currently working with some of the world’s foremost pharmaceutical and research companies. This is a clear demonstration of the quality of the ALPHADAS software and the opportunity to expand Instem’s market to early clinical studies.”

Judges Scientific (LON:JDG 1425p / £75.8m)

Judges Scientific, engaged in the design, manufacture and sale of scientific instruments, announced that on 26 June 2013 it acquired 100 per cent of the issued share capital of Scientifica Limited, a specialist manufacturers of electrophysiology equipment, for a cash consideration of £12.0m and an earn-out capped at £1.0m. Scientifica’s unaudited accounts for the financial year to 31 March 2013 show revenues of £9.2m and pre-tax profits of £2.2m. The Acquisition is expected to be earnings enhancing with immediate effect. The Board believes that Scientifica is an excellent business operating in an expanding niche with considerable worldwide growth potential. The Acquisition and associated transaction costs are being financed from existing cash resources and an additional £9.0m term loan provided by Lloyds Bank Corporate Markets. The Loan is repayable over a five year period. The Group’s trading performance since the beginning of the current financial year has remained satisfactory. Order intake was strong in the first quarter and more subdued since, resulting in 4.7 per cent organic growth in order intake compared to the first 25 weeks of 2012. This is consistent with market expectations for the year as a whole.

Milestone Group (LON:MSG 0.575p / £2.40m)*

AIM quoted provider of digital media and technology solutions announced its half yearly report for the six months ended 31 March 2013. The net loss for the period was £487,589 (six months to March 2012: £549,621) and had net liabilities of £188,838 (31 March 2012: £311,786) It counted as period highlights the launch of the Passion Project, Milestone’s social engagement programme focused on helping young people match interest and skills with vocational training and employment opportunities; a MOU signed with ten London football clubs’ community trust schemes to deliver a pan London focused community football tournament in 2013;  and a definitive Agreement signed with Spirituality for Kids to deliver materials that meet the standards within the UK Curriculum for the teaching of Spiritual, Moral, Social and Cultural Education – product trialled in UK primary schools and now ready for 2013/14 academic year. £357,500 of new funds were raised by way of placings during the period and a further £50,000 raised post period end. These funds were raised at a significant premium to existing market price; and Milestone also realised value from the sale of investments during and after the period.

Oxford BioMedica (LON:OXB 1.625p / £23.0m)

The leading gene-based biopharmaceutical company announced an update on Glaucoma-GT, a novel gene-based therapy for the treatment of uncontrolled chronic glaucoma.  In collaboration with Mayo Clinic, Rochester (USA), Oxford BioMedica is conducting pre-clinical studies to establish the feasibility of treating glaucoma using its proprietary LentiVector® gene delivery technology expressing a COX-2 gene and a PGF-2α receptor gene in order to reduce intraocular pressure. Over the past 18 months, Oxford BioMedica has successfully completed initial pre-clinical studies to demonstrate that the LentiVector® platform is both well-tolerated at high vector dose and transduces suitable target cells following transcorneal injection into the front of the eye.  In January 2013, the Company decided to evaluate a more translational glaucoma model in order to maximise proof of concept data.  Oxford BioMedica now plans to initiate its first pre-clinical efficacy study which will evaluate, amongst other measures, the lowering of intraocular pressure.  The Company continues to move Glaucoma-GT towards future clinical development, furthering its growing ophthalmology portfolio.

Petards Group   (LON:PEG 14p / £1.52m)

Petards announced an offer for Water Hall, by which Water Hall (WTH:LON 2.375p / £1.89m) Shareholders will be entitled to receive 12.5 New Petards Shares and £2 nominal convertible loan notes per 100 Water Hall Shares. The Convertible Loan Notes convert into Petards Shares at a price of 8p, are unsecured, are redeemable at par five years from the date of issue and carry a coupon of 7.0 per cent. per annum. The Offer values the entire issued and to be issued share capital of Water Hall (assuming full conversion of the Water Hall Loan Note) at approximately £3.56m, assuming a price per Petards share of 16.5p, the closing mid market price as at close of business on 28 June 2013 (being the last practicable date prior to the date of the Announcement), and valuing the Convertible Loan Notes at nominal value. The Offer values each Water Hall Share at approximately 4p which represents a premium of approximately 100 per cent. to the closing mid market price of 2 pence for each Water Hall Share as at the close of business on 28 June 2013, Petards was recently informed by its bankers that its overdraft facilities amounting to £1.65m would be withdrawn. On 28 June 2013 Water Hall announced that it had acquired the Petards Bank Debt. In conjunction with the announcement, Water Hall has agreed to continue to make a £1.65m working capital facility available to Petards. In view of Water Hall’s 29.99 per cent shareholding in Petards and ownership of Petards’ current debt (as on 28 June 2013) and in the absence of any credible alternative in the time available, the independent Petards directors and the independent Water Hall director have agreed the Offer as the most realistic means of securing the Company’s future. In the absence of the Water Hall Facility, Petards would not have been able to continue trading as alternatives sources of finance were not available in the necessary timeframe.

Plethora Solutions Holdings (LON:PLE 2.2p / £7.61m)*

Plethora Solutions Holdings yesterday said at its AGM that it has received the Day 180 List of Outstanding Issues from the European Medicines Agency (EMA). This formal response is in line with late stage procedures in the approval process. Based on established timelines the Company expects the decision in relation to marketing authorisation by the end of 2013, and, if granted, this would allow marketing to commence in 2014. Concurrent with the approval process the Company has significantly increased its business development activities with the objective of securing one or more partners to market PSD502 not only in the EU but other territories under the Company’s control. Discussions have commenced with a number of companies, however, the timeline for agreement and likely structure and quantum of any transaction is hard to determine at this stage. It is the Company’s objective to secure a marketing partner before the end of 2013.

Plexus Holdings   (LON:POS 195p / £161m)

Plexus Holdings the oil and gas engineering services business and owner of the proprietary POS-GRIP(R) friction-grip method of wellhead engineering, announced it has been awarded its first contract with eni Australia Limited (eni Aus), a subsidiary of eni S.p.A. The contract is for the supply of 10,000psi POS-GRIP wellhead technology with mudline casing support and services, initially for one exploration well offshore Australia. The contract is estimated to be worth £280,000, with revenues commencing in September 2013, and includes an option for the continuing use of Plexus wellhead and mudline equipment which is anticipated to lead to a further three wells with an additional estimated value of £1m. This contract falls within the Plexus’ licensing, manufacturing, distribution, and agency agreement with Breda Energia S.p.A (Breda), a provider of specialist products and services to the oil and gas sector worldwide (see press release 05.12.11). The agreement granted Breda with exclusive rights to manufacture, rent, sell and service POS-GRIP exploration and production wellheads and other related POS-GRIP products exclusively to eni S.p.A.

Premier Gold (LON:PGR 0.21p/£2m) 

Premier Gold, the Central Asia-focused gold exploration and development company, has entered into a convertible loan agreement with Tridevi Capital Partners (I) L.P. for the provision of £1m to advance the Company’s exploration programme at the Cholokkaindy gold licence in the Kyrgyz Republic. The convertible loan will allow Premier Gold to carry out the necessary work to establish a maiden gold resource by the end of this year. In order to do so, the Company needs to assess the three dimensional picture of the mineralisation at Cholokkaindy through drilling for the first time; as well as conducting further trenching work and soil sampling to upgrade, extend and infill the known areas of mineralisation. The funds will be received by Premier Gold in four equal quarterly tranches over the next twelve months. The convertible loan has a five year term and accrues annual interest of ten per cent which can be paid by the Company in shares or in cash upon redemption or maturity.

Tanfield Group (LON: TAN  21.25p / £29.64m)

Tanfield Group, manufacturer of aerial work platforms, announced its final results for the year ending 31 December 2012. Management reported recovery in key markets for aerial lifts  with demand outstripping the capability to supply. Gross margins increased to 41 per cent (2011: 37 per cent), but the loss from operations in the period was £15.3m (2011 £15.2m). Discussions on the sale of the  Snorkel division are on-going. Jon Pither, Chairman of Tanfield, said: “As we predicted, global demand for aerial work platforms continued to grow significantly throughout 2012, pricing has improved and margins increased. Customers remain engaged in fleet replacement programmes after ageing their fleets during the economic downturn. However, the extended cash-to-cash cycle of key markets in the Asia-Pacific region, combined with supply chain constraints put additional strain on our working capital, so we reined in production during the final quarter in order to rebalance inventory and maintain cash.”

Tricorn Group (LON:TCN 33.25p / £11.1m)

Tricorn Group announced that it has agreed terms for the formation of a joint venture in China which will manufacture larger diameter tubular assemblies. The new company called Minguang-Tricorn Tubular Products Nanjing Ltd will be fully operational following the approval of its business licence which is expected around the middle of this month. The joint venture formed between Tricorn’s wholly owned subsidiary in China, Maxpower Automotive Components Manufacturing (Wuxi) Ltd and Nanjing Minguang Oil Pipe Company Ltd will be based in Nanjing. The facility there offers significant scope for expansion and will initially have around 40 employees. Under the terms of the agreement, Tricorn will own 51 per cent of the joint venture. Maxpower Wuxi will pay consideration of RMB 3,920,700 (£0.39m) into the joint venture, funded from short term borrowings, whilst Minguang’s consideration will be satisfied through the provision of plant and equipment and operational capability. The joint venture will supply exclusively through Tricorn’s businesses in China and overseas.

TyraTech Inc. (LON:TYR 6.5p / £7.63m)

A natural sciences company announced its final results for the year ended 31 December 2012. In the period, it secured a trademark licensing agreement with Terminix International Company to market and sell TyraTech insecticide products under the Terminix® brand for consumer household use in the USA.  This trademark licensing agreement was assigned to the new business enterprise formed with AMVAC Chemical Corporation, Envance Technologies, LLC. The company also completed a new business enterprise agreement with AMVAC to commercialise existing and new pesticide products using TyraTech Nature’s Technology® in the global consumer, commercial and agricultural markets in the period. It received a significant upfront licensing fee from AMVAC for licensing TyraTech Nature’s Technology® to the joint enterprise, named Envance Technologies, LLC. TRY also reached a distribution agreement with a major US retailer to launch nationally the Terminix® Ultimate Protection™ product line of aerosols and completed personal repellent product and registered in all 50 U.S. states, Germany, and the UK. Registration was also received from France in 2013. It received registration in the UK for non-toxic head lice products. Product revenue decreased to US$0.3m (2011: US$4.4m) and collaborative revenue increased to US$3.2m (2011: US$2.7m), which included an upfront license fee from AMVAC for licensing TyraTech Nature’s Technology® to the new joint enterprise, named Envance Technology, LLC. The gross profit decreased to US$3.1m (2011: US$4.7m) and the net loss before and after taxes increased to US$2.9m (2011: US$2.7m). Cash and cash equivalents increased to US$1.5m at year end (2011: US$0.9m) although post the period the Company raised approximately US$4.3m, net of expenses, through a share placement and subscription and American Vanguard Corporation (the parent company of AMVAC) purchased a 29.4 per cent shareholding in the Company.

UBC Media Group (LON:UBC 2.25p / £4.59m)

UBC announced that it has signed an agreement for online video distribution and advertising sales with Rightster, the video distribution and monetisation specialist. The partnership will see Rightster using UBC’s content to launch an Entertainment News channel on YouTube. Joining the fastest growing news content Multi Channel Network on YouTube, Entertainment News will benefit from video search engine optimisation, social media seeding and cross promotion as well as premium media sales and sponsorship opportunities. Rightster will also distribute UBC’s Entertainment News to other online publishers in their 2,000 strong network, offering two-minute, self contained bulletins of entertainment news content twice a day at key ‘watch times’. Advertising sales will be handled by Rightster who will share revenues with UBC and have paid an advance against these sales as a demonstration of their confidence in the success of the partnership. Simon Cole, Chief Executive of UBC commented: “Finding partners through whom we can create new revenue streams for our existing skills and content, with little or no incremental cost is a key strategy for UBC. Rightster have demonstrated their belief in the ad-funded model and have impressed us with their rapidly growing network of publishers.”

Xenetic Biosciences (LON:XEN 6.125p/£24m) 

Xenetic Biosciences, the bio-pharmaceutical company specialising in the development of high-value differentiated biological products, vaccines and novel cancer drugs, has appointed Robert Gagnon as Chief Finance Officer of Xenetic Biosciences Inc., the company’s US subsidiary. Mr Gagnon’s extensive background in finance, US financial reporting procedures and capital markets is highly relevant to Xenetic as the Company continues expand its US drug development operations and also as it continues to explore ways to efficiently achieve a possible US listing. Mr Roberts has previously worked with Biogen Idec Inc., a US$50bn market cap company, where he progressed rapidly from Associate Director of a small group of business units to Vice President of Finance, Business Planning and Chief Accounting Officer for his final two years at the company. After leaving Biogen in 2012, he worked with Clean Harbors, Inc., the provider of environmental, energy and industrial services throughout North America with annual revenues of US$3.7bn as Executive VP, CFO and treasurer.

*A corporate client of Hybridan LLP

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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.