AGM Trial Results, CDOG Final results, CRA Final Results, CRAW Acquisition, EMAN Placing, GLS Final Results, Placing and Collaboration, GFIN Partnership, HZM Drill Results, ITM Tender, KWS Final Results, MARL* Site Ownership, MDZ* Business Update, MKT Acquisition, MTHP Collaboration, OPTI* Research Update, PEG* Contract Award, PHC Agreement,
A full archive of previous weeks’ Small Cap Wraps can now be viewed on www.hybridan.com.
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.
Applied Graphene Materials plc (LON:AGM 282.90p/£47.98m)
Applied Graphene Materials (LONAGM), the producer and manufacturer of specialty graphene materials, reports positive preliminary findings following independent performance testing on graphene reinforced polyurethane coatings using graphene produced by the group. Polyurethane coatings are used in a wide range of industries including automotive, aircraft and general industrial coatings. Although the extensive test programme is continuing, the initial results demonstrate that low loading levels of the group’s graphene nanoplatelets substantially enhance the scratch resistance and ultimate tensile strength of a polyurethane clearcoat, and critically with minimal impact on transparency or colour. This opens up the route to further development for commercial applications in numerous high performance paints and coatings. AGM will be sharing the findings of the test programme with its coatings industry partners and also engaging with other interested parties when at the European Coatings Show in Nuremburg, between 21 April and 23 April 2015.
Cdialogues plc (LON:CDOG 312.5p/£16.38m)
The provider of mobile marketing solutions to Mobile Network Operators announced final results for the year ending 31st December 2014, including the declaration of a 2p maiden dividend. In its first set of full year results since listing the company reported a 117
per cent increase in revenues to €9.92m of which 76 per cent were subscription generated. Profit before tax was up 89 per cent to €2.61m. Earnings per share were up 77 per cent to €0.43m. Free Cash Flow was up 108 per cent to €1.22m, and net cash as of 31 December 2014 was €2.42m from €0.64m. Building on a year that saw significant new business wins and diversification of clients, the outlook stated that the company is well placed to continue to grow customer numbers under existing contracts and also to add new customers in new geographies.
Corac Group plc (LON:CRA 4.06p/£17.13m)
Corac, the specialist engineering group focused on the aerospace & defence and energy & process industry sectors, announces final results for the year ended 31 December 2014. Revenue increased by 12 per cent to £21.7m (2013: £19.3m) and operating losses were reduced by 10 per cent to £3.9m (2013: £4.3m). Adjusted EBITDA losses reduced by 27 per cent to £2.1m (2013: £2.9m) and the group’s cash closed at £9.6m (2013: £13.7m). There were major defence contract wins with long-term revenue visibility, with additional projects in renewable energy and power generation. Corac have completed heat exchangers for a major refinery project in Saudi Arabia, high temperature chemical processing in Wales and multiple cooling towers in Europe. The group also negotiated terms for manufacturing and commercial exploitation of steam expander technology.
Crawshaw Group plc (LON:CRAW 52.24p/ £28.70m)
Crawshaw Group, the fresh meat and food-to-go retailer, announces that it has acquired 100 per cent of the share capital of Gabbotts Farm Limited for £3.9m utilising existing cash resources on a “debt free cash free” basis from Cribbin Family Butchers. Gabbotts Farm operates 11 retail butchers units, which includes a factory meat mart attached to a small distribution centre, in the North West of England. Their retail format is almost identical to that of the company, selling quality fresh meats and food-to-go at value prices. Gabbotts Farm generated a turnover of c. £10.8m and an EBITDA of £0.8m (before group management fees and one off costs) for the financial year ended 31st December, 2014. The acquisition will increase earnings immediately and provide the company with access to customers in a completely new geographical region, as well as presenting the potential for operational synergies to further enhance profitability.
Everyman Media Group plc (LON:EMAN 92.20p/ £172.34m)
Everyman Media Group, a leading independent cinema group in the UK that currently owns and operates eleven cinemas based in London, the South East of England, Birmingham and Leeds, announces that it has raised £20m via a placing at the placing price of 85 pence per share. The net proceeds of the placing are to be used by the company to buy four cinemas from Odeon Cinemas Limited and ABC Cinemas Ltd located in Gerrards Cross, Esher, Muswell Hill and Barnet and to fund an acceleration of the company’s organic rollout plan. Geographically, the target sites complement the existing Everyman estate. The cash consideration for the target sites is £7.1m and the directors expect to spend approximately £6.1m to refurbish the sites to existing Everyman standards. In aggregate, the target sites have a total of 14 screens, compared to 21 screens currently in operation within Everyman sites. The target sites reported unaudited revenue of £3.6m and an EBITDA of approximately £0.5m for the 12 months ended December 2014. Following refurbishment, the directors expect the target sites to achieve a significantly improved level of financial performance. The directors believe that, within 12 months, all of the new target sites will be fully operational as Everyman cinemas.
Galasys PLC (LON:GLS 29.50p/ £10.37m)
Galasys, a market leading provider of integrated amusement park solutions and services to the fast growing amusement parks industry in Asia, announces its full year unaudited results for the year ended 31 December 2014. The company’s revenue for 2014 were up by 45 per cent at RM38.62m (2013: RM26.67m), which allowed gross profit to increase by 83 per cent to RM19.52m (2013: RM10.64m). EBITDA was up by 48 per cent at RM12.58m (2013: RM8.5m) and profit before tax was up 35 per cent at RM11.34m (2013: RM8.38m). Profit after tax was up 30 per cent at RM9.40m (2013: RM7.21m) and cash at RM12.22m (2013: RM2.16m). Repeat and recurring revenue increased to 66 per cent of sales (2013: 60 per cent) and the board recommended final dividend of 1.084 sen, c. 0.2 pence per share. Galasys also announces a proposed placing at 30 pence per new ordinary share by way of a subscription agreement by Beijing Shiji Information Technology. Galasys and Shiji Information have also signed a collaboration agreement under the terms of which the two groups will cooperate in the tourism and leisure industry in Asia.
Gfinity plc (LON:GFIN 25.25p/£19.52m)
Gfinity, a leading eSports business and News UK, part of the global media group News Corp, announces they have signed a major sponsorship agreement for The Sun to become Gfinity’s official newspaper and on-line news partner in the UK and Ireland. The two-year commercial partnership is the first such major agreement signed by Gfinity and will contribute significantly towards the company achieving its revenue targets this year and in 2016. The deal is exclusive to the publishing and on-line media industry in the UK and Ireland; however, it does not block Gfinity from negotiating a separate deal for the rights to broadcast its content and tournaments on television. The partnership contract enables The Sun to become: the official partner for 2015 and 2016 Gfinity Championship Series, the title sponsors of 2015 and 2016 Gfinity UK Championship Series and the lead sponsor of Gfinity’s High Performance Programme. The agreement signals the growing popularity of eSports in the UK and Gfinity hopes it will lead to an increase in audience figures, create new revenue streams and provide an opportunity to uncover the next generation of eSport stars.
Horizonte Minerals plc (LON:HZM 2.79p/ £14.11m)
Horizonte, the nickel development company focused in Brazil, announces the completion of its infill resource drilling programme at its Araguaia nickel project in Para State, north central Brazil where initial results have demonstrated significant new high grade drill intersections (>2 per cent Ni). New high grade nickel intersections from completed infill resource drilling on the Pequizeiro deposit include: 9.66 meters grading 2.28 per cent Ni, 2.29 meters grading 2.17 per cent Ni, 10.80 meters grading 2.13 per cent Ni, and 20.17 meters grading 2.09 per cent Ni; the company are now in the final phase of the geotechnical and hydrogeological drilling programme across the proposed process plant site which will provide detailed information on ground conditions to assist in the design of the process plant structures. This will be completed in Q2 2015, with final infill drill results also due then.
ITM Power plc (LON:ITM 33.85p/£60.27m)
ITM Power, the energy storage and clean fuel company, announces that it has won a competitive tender to supply an integrated hydrogen system for use at the European Marine Energy Centre (EMEC) tidal test site on Eday, Orkney, Scotland. The system’s principal component is a 0.5MW polymer electrolyte membrane electrolyser with integrated compression and up to 500 kg of storage. The company has also been offered an additional maintenance contract alongside the integrated system as well as a fuel cell for local back up power. The total contracted value of the project is £1.79m. Including this project, the company currently has £9.97m of projects under contract and a further £5.79m of contracts in final stages of negotiation. The 0.5MW electrolyser will be used to absorb excess power generated by the tidal turbines testing at EMEC. The hydrogen gas generated will be compressed and stored, with some of the gas being used in (an optional) hydrogen fuel cell to provide backup power to critical EMEC systems. The remainder of the hydrogen gas will be used off-site by a further project being developed separately which plans to absorb output of a local community wind turbine operated by Eday Renewable Energy Ltd.
Keywords Studios plc (LON:KWS 160.60p/ £95.95m)
Keywords Studios, the international technical services provider to the global video games industry, provides its full year results for the year to 31 December 2014. The group’s revenue increased by 130 per cent to £37.3m (2013: £16.2m), allowing for adjusted profit before tax to increase by 104 per cent to £5.1m (2013: £2.5m).The adjusted basic earnings per share was up by 48 per cent to 8.54c (2013: 5.76c) and there was net cash of £11.0m (2013: £15.3m), after £8.9m net cash consideration for acquisitions, £3.0m repayment in Babel Media borrowings upon acquisition, £1.5m costs of acquisitions and integration expenses, and £7.3m (net of expenses) raised in a placing. The company had strong organic growth, and continued to gain market share adding clients like Ankama, Bioware, Carbine, Frontier Developments, Nexon and Tencent. The group also significantly extended service capabilities and geographical reach through four acquisitions: Liquid Violet, Babel Media, Binari Sonori and Lakshya Digital.
Mariana Resources Ltd (LON:MARL 2.71p/ £21.38m)*
Mariana Resources, the exploration and development company with projects in South America and Turkey, announces that it has received notification from Teck Madencilik Sanayi Ticaret that it has terminated its one-time back-in right at the Ergama gold-copper prospect, Balikesir province, Western Turkey. As a direct result of this notification, Mariana will regain 100 per cent ownership of the 2,168 Ha Ergama property, with Teck retaining a 2 per cent NSR with respect to any future production from the property. Aegean Metals Group is of the opinion that the Ergama prospect contains both high and intermediate sulphidation epithermal gold mineralisation assemblages and a quartz(+/-clay) lithocap, both of which are interpreted to overlie porphyry style gold-copper mineralisation at depth. Drill testing of the highest priority geophysical and geochemical targets at Ergama has yet to be undertaken.
Market Tech Holdings ltd (LON:MKT 252.00p/ £74.71m)
Market Tech Holdings, the holding company that combines iconic real estate assets with an e-commerce business and owns and manages the main Camden Markets in Central London, announces that it has exchanged contracts to acquire a 0.84 acre property, hosting small businesses, for a total consideration of £44m, comprised of a £42m purchase price and £2m stamp duty. The property, known as Utopia Village in Chalcot Road, is located close to the group’s principal Camden Markets site and currently comprises 29 individual units totalling a net internal area of approximately 44,500 square feet. The property has development potential however the group plans to operate the complex primarily as a fully serviced co-working office environment where businesses can rent flexible accommodation with access to Market Tech’s e-commerce and business infrastructure, enabling the group to accelerate its growth plans while benefiting Camden and the surrounding area.
Midatech Pharma plc (LON:MTPH 285.00p/ £79.49m)
Midatech Pharma, the international specialty pharmaceutical with a diversified portfolio of high-value assets, announces the signature of a new research collaboration with Dana-Farber Cancer Institute, a principal teaching affiliate of Harvard Medical School, Boston, Massachusetts, one of the US’s premier cancer centres. Under the terms of the collaboration, Midatech Pharma and Dana-Farber will test the preclinical effectiveness of Midatech’s targeted nanomedicines against Glioblastoma (a type of brain cancer). The collaboration aims to find the most effective treatments to take into Glioblastoma patients as rapidly as possible, given the current unmet medical need. Glioblastoma represents approximately 17 per cent of all primary brain tumours (about 60-75 per cent of all astrocytomas) and is difficult to treat due to the involvement of different cell types. No financial terms were disclosed.
OptiBiotix Health plc (LON:OPTI 33.68p/ £24.85m)*
OptiBiotix Health, a life sciences business developing compounds to tackle obesity, high cholesterol and diabetes, provides a research update on its research and development programmes. OptiBiotix announced in December 2014 to undertake human studies on 50 subjects who have high cholesterol and its associated increased risk of cardiovascular disease. The aim of the study is to establish the extent of the cholesterol lowering potential of its product. The study commenced at the start of January; groups one, two and more than half of group three will have passed the halfway point (six weeks) of treatment and testing by the end of April. The study is expected to complete on schedule in July allowing data analysis and reporting in September as planned. The company also announced in March 2015 to screen 360 strains of bacteria for the presence of enzymes which produce novel oligosaccharides. The aim of this work is to identify non-digestible sugars with the potential to act as calorie free sweeteners, and/or selectively enhance the growth rate of specific microbial strains, species, and genera, to modulate the human microbiome. The first phase of that work is now complete and has shown: high enzyme activity in a number of Lactobacilli species tested, supporting earlier data; very high enzyme activity in a number of strains of a second species tested, suggesting the potential to produce high volume of sugars; and medium activity in a number of strains of a third species tested.
Petards Group plc (LON:PEG 11.00p/£7.99m)*
Petards, the developer of advanced security and surveillance systems, announces that it has been awarded a £0.6m contract by a major UK defence systems contractor to provide test equipment for use on a UK Ministry of Defence programme. The contract is for the design, manufacture and supply of equipment that will form part of a Defensive Aids Suite system integration test rig that will enable the customer to carry out verification of electronic countermeasure configurations prior to their installation on aircraft. Most of the equipment is expected to be delivered in the second half of 2015 and the project is expected to be completed early in 2016.
Plant Health Care plc (LON:PHC 105.00p/ £76.00m)
Plant Health Care, a leading provider of novel patent-protected biological products to the global agriculture markets, announces that it has signed an agreement with a major industry player in the agricultural space regarding the evaluation of its Innatus™ 3G peptide platform. This technology platform enables the design, production and screening of a large pipeline of peptides with diverse biostimulant properties. The peptides can be used for both seed treatment and foliar applications. They can also be combined with conventional crop protection chemicals, making them highly complementary to existing production practices. Plant Health Care has also continued to expand its research and development effort under the leadership of its Chief Scientific Officer, Dr. Zhongmin Wei. Over the past 18 months, the company added 4 research staff and, in 2015, plans to double its current research personnel. In addition, by mid-year, the company will relocate to a larger research facility in Seattle with over three times the square footage of its existing lab. The expanded workspace, staff increase, and planned addition of new growth chambers are expected to significantly accelerate the company’s ability to develop new peptide families.
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