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.
Bloomsbury Publishing (BMY) [124p/£91.98 million]
Bloomsbury Publishing announced that it is setting up a new business in India.
Among the fastest-growing economies in the world, and with a rapidly-increasing population where 50 million buy English books every year, India is an excellent market for the expanding and diverse product range of Bloomsbury. It is also steadily becoming an important source of authorship and will be a significant future e-books market.
Bloomsbury has already been operating in India for 25 years with a long-standing marketing and distribution partnership with Penguin. The group now plans to grow its presence in India by setting up a wholly-owned business. The Indian company will be led by Rajiv Beri, a highly-regarded publishing professional who has been managing director of Macmillan's Indian operations for over 15 years.
The company will be based in Delhi and is expected to be operational by May 2012.
Energetix Group (EGX) [28.5p/£18.57 million]
Energetix Group, which develops and commercialises alternative and efficient energy products, announced that its subsidiary Energetix Genlec (Genlec) has received a notice of allowance from the US Patent and Trademark Office for a key sub-system patent relating to its microCHP technology utilised in its Kingston microCHP appliance.
The patent, titled "Closed Cycle Heat Transfer Device and Method" is an important part of the integration of the Genlec organic Rankine cycle into the Kingston condensing boiler. The grant of this patent provides additional protection to the company's core product platform utilised in its Kingston microCHP product and builds on the company's intellectual property portfolio relating to its Genlec technology.
The company has a core patent granted in 32 countries which protects its organic Rankine cycle-based microCHP system.
IDOX (IDOX) [28.75p/£99.27 million]
IDOX, which supplies software and services, has announced that its information solutions division has won a five-year contract to manage the information service of the Greater London Authority (GLA) following a competitive tender process.
The contract is worth £800,000 across the five-year period and commenced in January 2012. IDOX will focus on delivery of the GLA's intelligence function, supporting evidence-based decision and policy making across the capital.
Minera IRL (MIRL) [71.5p/£85.50 million]
Minera IRL, the Latin America-focused gold mining company, announced the results of a feasibility study for the Don Nicolas Project located in mining-friendly Santa Cruz Province, Argentina.
The Don Nicolas Project is 100% owned by Minera IRL Patagonia SA, a subsidiary of Minera IRL. The study was managed by international engineering firm Wardrop, a Tetra Tech company. The project is on track to become Minera IRL's second producing mine, with commercial gold and silver production targeted to commence in the fourth quarter of 2013.
Based on a conservative gold price of $1,250 (£795) per ounce, the report estimates the project could potentially have a value of $44.7 million (pre-tax) and $25.1 million (post tax). The company can now proceed with the permitting and development of a new, highly-profitable goldmine to complement the Corihuarmi Goldmine in Peru.
San Leon Energy (SLE) [12.25p/£138.92 million]
San Leon Energy, the oil and gas company with assets in Europe and North Africa, has completed the drilling and initial evaluation, and has cased its Siciny-2 well in the SW Carboniferous Basin of Poland, which comprises of 880,000 acres held 100% by San Leon.
The well is located in the company's 100%-operated Gora Concession 70 kilometres to the south-east of the city of Zielona Gora.
These results show four potential zones for unconventional gas production, including a newly-identified interval. In total, more than 500 metres of potential reservoir were discovered for further analysis and possible testing. The management believes the complex nature of the carboniferous source rock, including natural fracturing, shows real promise for gas production.
Sarantel Group (SLG) [0.62p/£5.19 million]
Sarantel Group, a manufacturer of high-performance, miniature filtering antennas for mobile and wireless devices, has received its largest order to date from a leading military radio manufacturer for a range of different Sarantel antenna products.
The order is for GeoHelix® GPS antennas, which the manufacturer uses across a variety of products. It represents the culmination of many years of product and business development efforts between both companies. This order, part of a multi-year supply contract, is expected to be delivered over the next 12 months and is expected to have a significant impact on Sarantel's revenues and cash flow in the current financial year.
The company is currently considering a number of options for both short and medium-term financing, including a commercial loan.
Sphere Medical Holding (SPHR) [80.5p/£29.63 million]
This leading developer of innovative monitoring and diagnostic products for the critical care setting announced the publication of two studies that support the utility of real-time propofol measurement in routine clinical use.
The first study, carried out at Queen Elizabeth Hospital in Birmingham, UK, demonstrated that the use of Sphere Medical's Pelorus 1000 propofol measurement system has the potential to significantly improve the accuracy of patient dosage when administering propofol using target controlled infusion.
Sphere Medical also announced the publication of a paper titled "Performance Evaluation of a Whole Blood Propofol Analyser" in the online edition of the Journal of Clinical Monitoring and Computing. The authors' conclusion is that "the Pelorus 1000 propofol measurement system fulfils the requirements for measurement of propofol levels in whole blood samples with precision and accuracy suitable for elucidating propofol pharmacokinetics at clinically relevant concentrations".
Tanfield (TAN) [46.5p/£43.75 million]
Tanfield Group, the manufacturer of aerial work platforms, provided a trading update prior to entering the closed period ahead of its preliminary results for the financial year ended 31 December 2011.
Trading for the second half of 2011 was similar to that of the first half. The company's order book continued to grow as order intake significantly outstripped monthly shipment revenues. Equipment lead times extended as the growth rate was managed to ensure the company optimised the use of its working capital.
Net cash at 31 December 2011 was £3.4 million (31 December 2010: £3.6 million). The company also announced that it has conditionally raised gross proceeds of approximately £12 million by way of a placing of 29,268,293 new ordinary shares of 5p at a price of 41p per share, conditional on the passing of the resolution.
Toumaz Technology (TMZ) [9.88p/£62.16 million]
Toumaz, a pioneer in low-cost, ultra-low power wireless communications technology, announced a trading update for the year ended 31 December 2011.
At the end of 2011 Toumaz was reorganised into two distinct businesses: Toumaz UK, covering healthcare; and Toumaz Microsystems, covering semiconductor chips and low power wireless connectivity.
Toumaz UK saw the 510(k) approval by the US Food and Drug Administration (FDA) for the Sensium disposable digital plaster in July 2011. Following this, Toumaz established a joint venture with California Capital Equity (CCE) to commercialise the plaster to hospitals. The joint venture, Toumaz US, is 20% owned by Toumaz and the company will receive royalties on products sold using its intellectual property. The product has been launched in its first hospital and a general launch is expected in the second half of 2012.
Toumaz has also in the period entered into a non-exclusive licence agreement with a newly-established company to use the Sensium technology for sports and fitness applications worldwide, excluding North America. The terms include a licence fee and product development fees exceeding £1 million, with royalties on sales. Products are expected to be ready for commercialisation during the second half of 2012.
Toumaz Microsystems secured investment from LSE:IMG:Imagination Technologies as a strategic partner. Toumaz Microsystems' Telran product was cleared for EU and US distribution in October 2011 and supply agreements are already in place with customers.
Another product, Xenif, shipped in increasing volumes during 2011. The company secured £11.2 million of investment so that Toumaz Microsystems can develop the first multi-standard connectivity chip to satisfy the new Institute of Electrical and Electronics Engineers (IEEE) standards.
Triple Plate Junction (TPJ) [3.82p/£14.03 million]
TPJ advised investors that Newmont Ventures has provided a summary report on the initial exploratory drilling programme at the Hides Creek prospect in the Morobe Joint Venture area of Papua New Guinea, over which TPJ has a 25% carried interest through to commercial production.
Bill Howell, TPJ exploration director, noted: "The size and shape of the system is comparable to the Panguna porphyry copper-gold deposit on Bougainville Island, Papua New Guinea, which during its 17 years of operation between 1972 and 1989 was recognised in 1985 as the world's fourth-largest copper mine."
Gold Anomaly Limited, the company's joint venture partner in the Crater Mountain Project, released an announcement of results from Diamond Drill Hole NEV031. TPJ holds an 8% interest in the Crater Mountain Project. The commencement of a petrographic study of the mineralisation and alteration trends encountered in the Nevera Prospect drill holes should contribute to a better understanding of the potential of this large mineralised system.
ValiRx (VAL) [0.72p/£7.68 million]*
The AIM-listed life science company with a focus on cancer diagnostics and therapeutics for personalised medicine announced it has established a Scientific Advisory Board (SAB) to advise and assist the company as it looks to further develop its technologies and products in oncology therapeutics and diagnostics. The SAB will be instrumental in preparing to take current and future compounds into phase I clinical trials.
Late pre-clinical studies into one of the company's lead therapeutics, VAL201, carried out in collaboration with Oxford University, have firmly established a potentially important role for the compound in treating hormone-induced refractory prostate cancer and other conditions of hormone-induced uncontrolled cell growth including breast and ovarian cancer.
The company also reported the successful manufacture of the VAL201 compound to a regulatory compliant standard (GMP). VAL201 is currently undergoing regulatory toxicology studies and the GMP-produced compound will allow completion in a timely manner.
The company welcomes the support of the SAB as it completes the pre-clinical process and commences the regulatory process prior to clinical trials. The SAB includes Hilary Calvert, Richard Harbottle and Jean-Frédéric Sauniere. Calvert has recently been appointed director of cancer drug discovery and development at the UCL Cancer Institute. Harbottle is currently the group leader of gene therapy research in the section of Molecular Medicine at Imperial College London. Sauniere is currently medical oncologist at the Institut Paoli & Calmettes in Marseille.
YouGov (YOU) [62p/£60.23 million]
The international online market research agency issued an update for the six months to 31 January 2012 ahead of the interim results announcement due in April 2012.
Trading across the group in the first half of the current financial year has been in line with expectations and the board is confident of the full-year outcome. Double-digit organic revenue growth has been achieved in the six months. As announced at the time of the preliminary results in October, the group is investing significantly in developing new markets and products which has reduced profit margins in the first half.
The group's balance sheet remains strong with net cash at 31 January 2012 of approximately £10 million.
*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.
