Hybridan's Small Cap Wrap
This article is an edited extract from a non-independent research note issued by Hybridan.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Allocate Software (MNS) [79p/£50.21 million]
Allocate Software, the leading provider of workforce and compliance optimisation solutions, announced interims for the six months to 30 November 2011. Whilst revenue for the company showed marginal increase at £16 million (2010: £15.9 million), impairment and other charges during the period took Allocate to a pre-tax loss of £6.57 million (2010: £1.18 million profit).
Despite this, the company believes it could have a good full year to look forward to, having secured a multi-million pound long-term agreement with the Australian Defence Force in December which is likely to add significantly to the full-year revenues (through the extension of the deployment of Allocate's DefenceSuite to all personnel in the Australian army).
Angel Biotechnology Holdings (ABH) [0.28p/£9.0 million]*
Angel Biotechnology Holdings, the biopharmaceutical contract manufacturer, has agreed three further manufacturing agreements with OOO NPF Materia Medica Holding (MMH), a major Russian pharmaceutical company, with a combined value of £4.5 million.
Under the agreements Angel will initiate activities in its existing facilities with the aim to transfer the contracts to the joint venture company announced on 17 October 2011. It is expected these projects will run concurrently and take approximately 22 months to complete.
BlueStar SecuTech (BSST) [10.5p/£7.64 million]
Blue Star SecuTech, a leading provider of digital video surveillance solutions in China, provided a trading update for the second half of its financial year ending 31 March 2012.
The board reported that whilst BlueStar's sales prospects for the first few months from 30 September 2011 were encouraging, the outlook for revenues following the Chinese New Year holiday is lower than previously expected.
Furthermore, although the company succeeded in winning a number of contracts towards the end of 2011, it anticipates that revenue will not be recognised from some of these contracts until after its financial year end. As a consequence, BlueStar's revenues for the full year are expected to be lower than last year's revenues and will have a material effect on the company's net profits, which are now expected to be significantly lower than the board's original forecasts.
EServ Global (ESG) [19.75p/£38.9 million]
The global telecoms software supplier, which specialises in mobile money and value added services (VAS), has appointed Paolo Montessori as vice president, mobile money.
Montessori is a well-recognised figure in the global mobile VAS market and for the past three years has had a particular focus on delivering mobile money solutions. Prior to joining eServGlobal, Montessori was vice president sales for Comviva Technologies (formerly Bharti Telesoft), where he was closely involved in mobile money and payments and led both commercial and solution design in this field.
GW Pharmaceuticals (GWP) [90p/£119.75 million]
GW Pharmaceuticals has received regulatory approval for Sativex® in Austria as a treatment for spasticity due to multiple sclerosis (MS).
The launch of Sativex® in Austria is expected to take place during 2012 following completion of the national pricing and reimbursement process, and will be marketed by GW's partner, Almirall SA.
The company has also announced that, further to the November 2011 announcement of the filing of a new regulatory application to expand Sativex® to additional European countries, the dossier has been validated and is now under technical review by regulatory authorities in the following countries: Belgium, Finland, Iceland, Ireland, Luxembourg, the Netherlands, Norway, Poland, Portugal and Slovakia.
It is expected that this new European Mutual Recognition Procedure (MRP) process should complete around mid-2012.
Sativex® is currently available as a prescription medicine in the UK, Spain, Germany, Denmark, Canada and New Zealand. Launches are expected during 2012 in Italy, Sweden, Austria and the Czech Republic.
Sativex® is also in phase III clinical development as a treatment for cancer pain.
Interior Services Group (ISG) [144p/£48.1 million]
The international construction services group has signed a contract worth at least £100 million with Banco Santander (BNC) to construct and fit out a new data centre in the East Midlands.
The project includes the construction of two identical and technically complex buildings, each with an individual gross floor area of over 161,000 square feet.
Matchtech Group (MTEC) [211.5p/£49.49 million]
One of the UK's leading specialist recruitment agencies operating in the engineering, science, technology and professional services sectors provided a trading update for the six months ending 31 January 2012 and the board's current outlook for the year to 31 July 2012.
The group has continued to trade in line with the board's expectations. There was a strong net fee income performance across the whole group during the period, with a total of £17.0 million, up 26% against the same period last year.
Whilst the trading environment currently remains steady, the board remains mindful of the impact of uncertainty in the macroeconomic environment on business confidence and the effect this may have on permanent fees, which were 33% of the group's net fee income in the first half of 2012.
The board now expects that the group's full-year performance will be within the range of expectations, albeit towards the lower end of that range, with profits for the financial year again significantly weighted towards the second half.
The group will release its interim results for the six months ended 31 January 2011 on Wednesday 11 April 2012, at which point it will provide a further update on trading.
OMG (OMG) [23.5p/£16.78 million]
The mobile motion capture (mobile mocap) technology group announced a substantial contract for it division Yotta DCL, which is a highway-surveying company.
The four-year contract (with an option to renew for a further year) is expected to be worth £2.27 million in total, with Yotta performing a traffic speed condition survey (TRACS) to determine the condition of the road surface. In total, approximately 140,000 kilometres of motorway and other major roads across England will be surveyed using the company's new Tempest vehicles.
OMG also announced that its Vicon division has signed an agreement to provide mocap technology to the Imaginarium, a London-based studio, with 80 of its cutting-edge T160 mocap cameras being supplied along with Vicon's new Blade software, providing all the crucial elements needed for mocap.
Whilst the company faced a difficult last year (prelims for the year to 30 September 2011 showed an 81% drop in profits to £0.7 million) these recent contract wins marks a good start to 2012 and we look forward to seeing how the company progresses over the course of the year, with a particular highlight being a new camera the company is working on.
Solid State (SSP) [139p/£9.44 million]
Solid State, the AIM-listed supplier of battery power solutions, specialist electronic components and industrial/ruggedised computers to the electronics market, announced that trading in the year ending 31 March 2012 has continued to be very satisfactory and the result for the year is now expected to be ahead of current market expectations.
While revenues have been broadly as expected, the sales mix has shifted in the second half in favour of higher-margin product.
Surgical Innovations Group (SUN) [12p/£47.42 million]
The designer and manufacturer of creative solutions for minimally-invasive surgery announced that it has received Food and Drug Administration (FDA) approval for its Logic range of reusable instruments.
These instruments are compatible with the group's Logic Handles, which already have approval in the US, and are currently used with the company's Resposable LogiRange - FDA approval will therefore help the company to further penetrate these markets and take advantage of this sizeable market.
A new contract with the Premier healthcare alliance was also signed, with the company's master dealer for the sale of the group's Resposable LogiRange, and Logic range of reusable instruments, running for three years from 1 April 2012 with an option to extend for two years upon the agreement of both parties. A strong update by the company.
Symphony Environmental Technologies (SYM) [5.75p/£7.35 million]
Symphony Environmental Technologies, the specialist in advanced plastics technologies, reported that on 31 January the company presented its advanced plastic and other environmental solutions to business and political leaders at the residence of the British Ambassador in Mexico.
Particularly pleasing was the strong interest in the 'd2Detector', a portable device which shows whether the plastic product has been correctly made, and helps brand owners to detect counterfeiting.
In Mexico, Symphony, through its exclusive distributor Plasticos Degradables is actively involved in research and development with universities and institutions. A new laboratory with advanced equipment will be opened in March.
Tower Resources (TRP) [4.35p/£53.33 million]
Tower Resources, which has exploration assets in offshore Namibia and Uganda, provided an update on operational progress in Uganda, where the Mvule-1 well was expected to spud on 9 or 10 February.
Tower's wholly-owned subsidiary, Neptune Petroleum (Uganda), has begun mobilisation of the OGEC K900 drilling rig to the Mvule-1 site. Preparation of the site is near completion and rigging up was about to begin. The well is anticipated to reach a total drilled depth of about 600 metres within two weeks of spud.
A further update will be released once the well has spudded. The well is evaluating estimated recoverable resource potential of 80 million barrels.
Read: AIM commodities players update investors, for the latest on Tower's progress.
ValiRx (VAL) [0.71p/£7.52 million]*
The life science company announced that its cancer screening biomarker, NAV3, has received patent approval by the European Patent Office. The company is now in position to begin production and marketing of the biomarker.
The biomarker is one of five patent family assets the company's subsidiary, ValiFinn Oy, purchased from Pharmatest Services Oy in January 2012.
ValiRx retains all commercial rights to the five patent family assets and is currently in negotiation with clinical partners for potential production.
Zeta Compliance Group (ZCGP) [50.5p/£4.43 million]*
Zeta Compliance Group announced that five of its clients renewed their long-term contracts, which will provide revenues of £985,000 over the coming year. Four of these clients are in the retail sector and Zeta will be responsible for the monitoring of approximately 6,900 sites around the UK.
The company faced difficult market conditions in the last quarter of the financial year ending 31 January 2012 with preliminary annual results due in May.
*A corporate client of Hybridan LLP
The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week. Our review will usually be of those companies whose market capitalisations are less than £50 million although we may occasionally cover larger companies. Our review is not intended to constitute research and is not to be taken as investment advice.
A non-independent research note:
(a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research; and
(b) is not subject to any prohibition on dealing ahead of the dissemination of investment research (although Hybridan does impose restrictions on personal account dealing in the run up to publishing research as set out in their Conflicts of Interest Policy).
The individuals who prepared this document may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result, both Hybridan LLP and the individual partners and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document.
It was not originally intended to be distributed to Retail Customers, and is included here for information and discussion purposes only. It does not form a recommendation to invest or otherwise. It is intended as a weekly review of some of the most interesting small cap stories of the past week. The content will usually review companies whose market capitalisations are less than £50 million although we may occasionally cover larger companies.
Our review is not intended to constitute research and is not to be taken as investment advice.
