No Barrier to DGB in AsiaPac
MediaZest rocking on
7DIG Contract Win, ABZA Placing, AVG Contract Win, BLU* Results, COS Appointment, DEMG New Accounts, DGB Contract Award, EVG Half Yearly Report FITB* Launch, HDD Preliminary Results, HVO Placing, IMO Partnership, JPR Trading Update, MDZ* Half-Yearly Report, OPTI* Placing, PLI* Agreement, REAT New Subsidiaries, REDT Strategic Contract, RED First Unit Connected
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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.
*A corporate client of Hybridan LLP
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.
7digital (LON:7DIG 7.50p/£8.12m)
7digital, the digital music and radio services company, announced that it is powering two mobile music services for Mariposa Holdings Group, Inc. in Brazil. These are now live with two of the largest telecommunications companies in South America: Oi and Algar Telecom. The provision of this kind of mobile music service is key to the company's growth, and these launches also mark a significant expansion in 7digital's South American business. As part of a contract win first announced in June, Mariposa licenses 7digital's streaming technology and catalogue management platform to power new mobile music services. Launching its product in October 2015, Brazil's Algar Telecom was the first mobile network to offer its customers Mariposa's music subscription and radio style services. Since 24th November, Oi, the largest telecommunications company in South America, with over 60 million subscribers in Brazil, also offers a music service to its high value customers as part of a mobile carrier data offer. Services from both Algar Telecom and Oi are created and managed by Mariposa and powered by 7digital's platform. 7digital also announced that it has signed an agreement with digital multimedia streaming platform Playster, to expand their music streaming service into 15 additional territories. Playster is the world's first all-inclusive online entertainment service, bringing together music, movies, books and games into a single subscription.
Abzena (LON:ABZA 63.00p/£61.90m)
Abzena, a life sciences group providing services and technologies enabling the development and manufacture of biopharmaceutical products, has conditionally raised £20m by way of a placing at 60p each with certain existing and new shareholders, and has agreed to acquire The Chemistry Research Solution LLC (TCRS), subject to certain closing conditions including completion of the placing. The placing price represents a 7.7 percent discount to the closing mid-market price of an existing ordinary share on 23 November 2015, being the last business day prior to this announcement. TCRS is a specialist contract chemistry and bioconjugation company based near Philadelphia, Pennsylvania, USA, with expertise in producing and analysing antibody drug conjugates. Abzena will pay $15m (£10m) to acquire the entire ownership interests in TCRS. The consideration will be paid as $8.8m in cash, the issue of 3,609,978 Ordinary Shares and $0.9m in restricted stock units over 901,697 Ordinary Shares and assumed long term debt of $1.5m.
Avingtrans (LON:AVG 120.05p/£33.42m)
Avingtrans, which designs, manufactures and supplies critical components, modules and associated services to the aerospace, energy and medical sectors announced that Maloney Metalcraft, part of Avingtrans plc's Energy and Medical Division, has secured a $2m contract with JGC Gulf International Co. Ltd. to supply gas treatment packages. The Saudi Arabian Oil Company (Saudi Aramco) is developing infrastructure for processing shale formation gas (unconventional gas) from the Jalamid field in the Al-Jouf and Northern Border Regions in the northwest part of Saudi Arabia. The first phase of this project (System "A") will involve gathering gas from the ST-53A area of these fields, routing it to an engineered surface facility location, then transporting it about 30 km via pipeline to a customer. The contract with JGC Gulf International, which is contracted by Saudi Aramco, covers the initial four gas treatment separation & filtration packages in System A. System B of the Project will be EPC tendered in Q2 2016, requiring four times the number of packages as System A. As well as bidding for System B, Maloney Metalcraft also anticipates the opportunity to pursue additional gas processing equipment work.
BELLUS Health (TSX:BLU CAD0.910/CAD43.16m)*
BELLUS Health, a drug development company focused on rare diseases, reported its financial and operating results for the third quarter ended September 30, 2015. Approximately 95 percent of the required events have occurred in the Phase III Confirmatory Study for KIACTA™. The KIACTA™ Phase III Confirmatory Study is expected to be completed by the first quarter of 2016, with top-line data expected to be available in the middle of 2016. The company presented data from clinical and pre-clinical studies evaluating Shigamab™ in the treatment of sHUS at the International Symposium on Shiga toxin (verocytotoxin) Producing Escherichia Coli (VTEC) 2015 Conference in Boston. The company concluded the quarter with a cash position of $10.1m, which should enable the Company to finance its operations beyond the data readout for the KIACTA™ Phase III Confirmatory Study. Revenues amounted to $0.59m for the three-month period ended September 30, 2015, compared to $0.42m for the corresponding period the previous year. The increase is primarily attributable to higher revenue recognised for accounting purposes in 2015 in relation to the service agreement with Auven Therapeutics for KIACTA™. R&D expenses amounted to $0.34m for the three-month period ended September 30, 2015, compared to $0.41m for the corresponding period the previous year. The decrease is primarily attributable to lower expenses incurred in relation to the development of Shigamab™. As at September 30, 2015, the Company had available cash, cash equivalents and short-term investments totalling $10.1m, compared to $12.31m as at December 31, 2014. Based on management's estimate, the current cash position should enable the Company to finance its operations beyond the data readout for the KIACTA™ Phase III Confirmatory Study, expected in 2016.
Collagen Solutions (LON:COS 9.08p/£15.78m)
The Board of Collagen Solutions, the developer and manufacturer of medical grade collagen components for use in regenerative medicine, medical devices and in-vitro diagnostics, announced the appointment of Jamal Rushdy as Chief Business Officer with immediate effect. Mr Rushdy has over 20 years' experience in the medical device arena, specifically within two mid-size high growth public companies and three successful start-ups. He has a unique track record of building businesses with successful exits and transforming organisations through integration and performance improvement, adding value through business development and functional leadership. Mr Rushdy has been employed at Tornier Inc, a Minneapolis extremities and biologics company, since 2007, most recently as Vice President of US Sales Operations. During his tenure he also served as the Vice President of the company's Global Sports Medicine, Biologics, and Business Development group where he led multiple acquisitions and corporate partnerships, including several focused on biologic technologies. Previous roles include Vice President of Operations & Business Development at Nexa Orthopedics in San Diego where he led his division through a high-growth period driven by a significant expansion in the sales force and rapid product introductions leading to the successful acquisition of Nexa by Tornier.
Deltex Medical Group (LON:DEMG 4.00p/£9.06m)
Deltex Medical Group, the global leader in oesophageal Doppler monitoring, announced that it has added two further new accounts to its platform programme in the USA. The first new account is a major teaching hospital in the mid-west region of the USA and is the second platform programme account in the Great Lakes sales territory which the Company established in the first quarter of 2015. The hospital has indicated that it intends to purchase at least 40 probes per month during its initial implementation phase, which the Company expects to increase as the technology is more widely adopted. Approximately 20 probes per month are scheduled to be used in the hospital's breast reconstruction surgical protocols to be launched in January 2016. The second new account is a large hospital in Washington State. It is the fourth platform programme account in the North-West sales territory, and the fourth platform programme account from the 26 strong hospital system with which the Company implemented a system-wide procurement framework agreement in January 2015. The agreement requires each hospital that participates to commit to purchase at least 30 adult surgical probes a month. The three existing accounts are all on track to get to 100 or more probes per month: they are each now regularly purchasing 50 to 65 probes per month having started their implementation programmes at 30 to 35 probes a month. This fourth new account's first order was for 50 probes. The new account contains a full service children's hospital with a large regional catchment area.
Digital Barriers (LON:DGB 50.50p/£40.13m)
The Board of Digital Barriers, the specialist provider of advanced surveillance technologies to the security and defence sectors, announced that it has secured a contract valued at £1m to supply additional land and sea-based TVI and ISP surveillance solutions to a major Asia Pacific maritime security agency. This follows an initial contract for TVI solutions received from the same customer six weeks ago, valued at approximately £0.13m. The contract is expected to be fully recognised this financial year and to lead to further follow-on awards. The Group's TVI surveillance technology offers secure distribution of real-time video from anywhere to anywhere, featuring end-to-end security, real world resilience and network optimisation that can stream usable live video using 60 percent less bandwidth than standard technologies. This exceptionally efficient use of available bandwidth enables TVI to deliver significant capability benefits and material cost savings over competing technologies. TVI has already been sold into more than thirty countries, and counts some of the most prominent defence and security agencies in the world as its customers, as well as an increasing number of commercial organisations. The Group's ISP (Integrated Surveillance Platform) combines TVI with other class-leading sensors, including the Group's RDC unattended ground sensor, to provide real-time video surveillance and intrusion alerts for remote and inaccessible locations. ISP enables live video streaming and intrusion data to be shared at local, regional and national levels across multiple agencies, supporting a coordinated, timely response to identified threats.
Evgen Pharma (LON:EVG 26.00p/£19.64m)
Evgen Pharma, the clinical stage drug development company focused on the treatment of cancer and neurological conditions, announced its unaudited interim results for the six months ended 30 September 2015. Highlights in the year to date included a £7m placing and admission to AIM on 21 October 2015. The company reported positive data on SFX-01 as adjunct to hormonal therapy in patient-derived xenografts using cancer tissues from early and late stage breast cancer patients (data presented at the American Association of Cancer Research, April 2015). Dr Alan Barge, former oncology head at AstraZeneca, appointed as a Non-executive Director in October 2015. The company also announced the acquisition of novel compounds in November 2015 via an exclusive worldwide licence from the Spanish National Research Council (CSIC) and the University of Seville, Spain. Financial highlights showed a net loss for the period was £1.2m (30 September 2014: net loss £1.1m) with a cash position at 30 September 2015 of £1.8m (30 September 2014: £0.2m), reflecting a £2.0m (gross) pre-IPO fundraising in August 2015. The IPO placing in October further strengthened the balance sheet and the company is fully funded to complete two Phase II studies of SFX-01 and to support further preclinical work.
Fitbug Holdings (LON:FITB 0.94p/£3.41m)*
Fitbug Holdings, the provider of online personal health and wellbeing services, announced the launch of Version 2 of the Kiqplan App, a new version of its innovative digital health and fitness training programme, Kiqplan. The app is highly functional, effective and includes an extensive new feature set. Covering personalised activity, nutrition, workouts, advice and motivation, Kiqplan integrates with all leading wearable devices, including Fitbug, Jawbone, Garmin and more, as well as smartphones and smartwatches including Samsung and Apple devices, plus other third party apps. Kiqplan helps users step by step through a personalised plan, to eat healthier, sleep better, exercise smarter, go further and ultimately achieve their health and fitness goals. Users who purchase the 12-week training programmes will be provided with weekly targets, health and motivational tips, workout videos, progress reports and simple, healthy recipes with accompanying calorie targets. Fitbug believe the Kiqplan app is a forerunner in the digital health sector and its launch is an important milestone achievement for Fitbug. Its comprehensive health and fitness programme gives context and meaning to the data generated by all compatible activity trackers. This ideally positions the product in the exponentially growing digital health and fitness market. To support this, the Company is building out its marketing presence; it has already added highly experienced digital personnel and is looking to further strengthen its marketing team to deliver compelling campaigns to support its products.
Hardide (LON:HDD 1.01p/£12.61m)
Hardide, the developer and provider of advanced surface coating technology, announced its preliminary results for the year ended 30 September 2015. Financial highlights showed that after a record H1, overall performance affected by downturn in oil & gas exploration, as expected. Revenue was £3m (2014: £3.03m), with gross profit of £1.81m (2014: £2.09m) leading to a group operating loss of £0.22m (2014: profit of £0.18m) and a loss before interest, tax, depreciation and amortisation of £0.33m (2014: profit of £0.12m). Cash at bank at 30 September 2015 was £2.33m (30 Sept 2014: £3.47m). Business/ Operational highlights showed key investment projects in UK and US progressed to plan - positioning the business for growth: the UK facility was upgraded - for greater efficiency and increased capacity. Installation of third large reactor and new facility in Virginia substantially completed which will be production-ready this month. Growing sales to North America and continental Europe, which were up 117 percent and 64 percent respectively, with encouraging progress with customer trials across a range of industries, including aerospace. The board remains cautious about near term outlook given oil & gas sector headwinds. However longer term prospects remain good, supported by a diversification strategy.
hVIVO (LON:HVO 235.00p/£165.69m)
hVIVO, the pioneer of human challenge models of disease, announced that it has raised, subject to certain conditions, £20.5m by way of a placing at a price of 225p per ordinary share. The placing price is at a discount of 11.6 percent to the closing middle market price of 254.50 pence per ordinary share on 25 November 2015, the latest date prior to this Announcement. The New Ordinary Shares will represent 11.7 percent of the company's enlarged issued ordinary share capital immediately following completion of the placing. The net proceeds of the placing are expected to be approximately £20m and will be principally used by the Company to progress PrEP-001 to Phase IIb, commence the stratification of asthma and advance the flu pathomics outputs into product candidates.
IMImobile (LON:IMO 151.00p/£90.56m)
IMImobile, a leading software and services provider of mobile customer engagement solutions, announced that it has partnered with Bharti Airtel Africa to deliver its mobile billing solution Tap2Bill for merchants and content providers across Africa. Airtel is a leading telecommunications service provider, with operations in 17 countries across Africa. The new Airtel Tap2Bill service will enable content providers and merchants to utilise Airtel's billing infrastructure to charge and bill their customers. The service will be available via a secure merchant portal, that will help content providers and merchants grow their business across Africa, without the need to invest in costly billing and payment capabilities. Africa is seen as the fastest growing market for mobile commerce in the world and as demand for new services grows as does the need for smarter solutions and engagement strategies.
Johnston Press (LON:JPR 37.42p/£41.24m)
Johnston Press, one of the leading local media groups in the UK, announced its trading update for the 17 weeks to 31 October 2015. The Board expects underlying profit and net debt for the full year to be in line with expectations. The company has retained their focus on cost savings, delivering strong cash flows and debt reduction. Underlying total revenues for the 17 week period to 31 October fell 8.8 percent year in the year, having fallen 7.6 percent in the second quarter. Underlying digital revenues were up 8.4 percent, whilst publishing revenues fell 10.8 percent, with print advertising revenues down 14.7 percent. 1XL, the digital advertising exchange partnership, launched in late 2014, helped the National digital advertising category grow by 106.5 percent in the period, and has enabled them to achieve overall growth in national combined print and online display revenues of 3. 8 percent for the period. Former classified categories of Employment and Property declined 22.4 percent and 20.8 percent respectively in the period impacting heavily on both overall print and digital revenues. Digital audience growth remains a priority and the number of unique users has grown on average by 22 percent to 21.5m per month during the period. Circulation revenues were down 7.2 percent in the period, having declined 6.5 percent in the second quarter. The company has continued to focus on offsetting revenue decline with cost reduction, and has made good progress in controlling production, editorial and advertising costs in line with strategic initiatives: 'News room of the future' and 'Sales force of the future'.
MediaZest (LON:MDZ 0.153p/£1.61m)*
MediaZest, the creative audio-visual company, reported unaudited results for the six months ended 30 September 2015. Financial highlights showed revenue for the period was £1.61m up 1.6 percent (2014: £1.58m), leading to gross profit of £0.62m up 17.2 percent (2014: £0.53m) and EBITDA was a profit of £8,000 (2014: loss of £0.18m). After deducting interest of £49,000 (2014: £26,000), administrative expenses before depreciation of £0.61m (2014: £0.71m), depreciation of £22,000 (2014: £27,000) and amortisation of £12,000 (2014: £2,000), the Group made a loss for the period after taxation of £60,000, reduced by 70.4 percent (2014: £0.20m). An operational review showed that the group has made meaningful progress in the last six months which has generated a positive EBITDA for the period. This is the first time that the Group has been in a position to report this. Turnover has increased by 1.6 percent against the comparable period in the prior year; however a significant improvement has been achieved in the gross profit margin which has increased from 33.4 percent in the prior period to 38.5 percent. This increase is as a result of the Board’s ongoing strategy of focussing on providing a full service offering to its client base. As well as equipment sales and installation fees, new business efforts are currently targeted towards providing ongoing managed services that include maintenance, content management and data analytics. During the six month period to 30 September 2015, revenue has continued to be generated across the retail, corporate and education sectors. The Retail sector (including Automotive Retail) generated over £900,000 through multiple store deployments across the UK and Europe. This included work for prestigious clients such as Hyundai, Adidas, The Post Office, Belstaff, Ted Baker, Diesel, Chivas Regal, TM Lewin and John Lewis Partnership. The Corporate sector generated almost £450,000 of revenue with a large number of clients including Pfizer, Churchill Retirement Living and Virgin Active. Education provided a smaller proportion of income, generating approximately £250,000 of revenue. Furthermore, the Group continued to grow its relationship with Hyundai working on a number of projects during the half year in both their Rockar partnership and other Hyundai dealerships. Further mandated business is scheduled for completion in the second half of this financial year. The work completed by MediaZest on the much acclaimed Hyundai Rockar Bluewater Digital Showroom was recognised with two high profile industry awards presented by Retail Week in May 2015 and POPAI in September 2015.
OptiBiotix Health (LON:OPTI 77.70p/£56.66m)*
OptiBiotix Health, a Life Sciences business developing products to tackle obesity, high cholesterol and diabetes announced that it has raised £1.5m, at a price of 75 pence per share. The Company intends to use the proceeds of the Placing to: enhance its in-house product development capability in the microbiome space by the recruitment of four new development/ formulation scientists. This is expected to support opportunities for partner joint development; extend its OptiScreen® technology platforms into other application areas, such as diabetes and bone health. This is expected to create new opportunities with existing and new partners; create a new 'SweetBiotix™' platform with a focus on developing 'sweet healthy sugars'. This accelerates the progress made with the companies OptiBiotix® platform, and extends OptiBiotix's technology platforms into new application areas, in particular skin health. This creates new product opportunities in large global markets including skincare ($121bn), Health Care Acquired Infections ($82bn) and wound care ($18.3bn). The Company believes these developments provide significant growth opportunities to ensure OptiBiotix remains at the leading edge of an emerging market forecast to become one of the world's fastest growth areas. OptiBiotix has made good progress since listing and now looks to build on this solid foundation to build a microbiome business with sustainable and significant value for shareholders. Following the Placing the Company will increase its net funds from £2.2m to circa £3.7m.
ProMetic Life Sciences (TSX:PLI CAD3.21/CAD1,865.32m)*
ProMetic Life Sciences reported revenues of $5.7m for the third quarter ended 30 September 2015 compared to $2.3m for the third quarter in 2014, with year-to-date product sales ahead after the first nine months of 2015 at $9.2m compared to $7.3m for the first nine months of 2014. During the third quarter of 2015, ProMetic received an orphan drug designation status for its human plasma derived plasminogen drug by the European Commission for the treatment of plasminogen deficiency; received confirmation that its plasminogen drug was safe and well tolerated in plasminogen-deficient patients and proceeded with the administration of a higher dose; completed the acquisition of Emergent BioSolutions' (Emergent) plasma collection centre located in Winnipeg, Canada which was announced in May. Emergent's plasma collection centre is an FDA and Health Canada licensed plasma collection facility; and, received confirmation that its PBI-4050 was safe and well tolerated in the first 12 metabolic syndrome with associated type 2 diabetes patients and proceeded with the enrolment of an additional 24 patients. The Corporation finished the third quarter ended September 30, 2015 with a strong cash position of $42.5m. The company also announced that it has entered into a strategic partnership with ProThera Biologics Inc. for the development and commercialisation of human plasma-derived Inter-alpha Inhibitor Proteins. The agreements provide ProMetic with global, exclusive intellectual property rights to commercialise products for two clinical indications and both companies have strategic interest in the other's IAIP-related therapeutic areas through a royalty- bearing cross-license agreement.
REACT Group (LON:REAT 1.52p/£2.94m)
REACT Group, the specialist provider of rapid response deep cleaning and emergency decontamination services, announced the expansion of its service offerings into Licensed Asbestos Removal and Occupational Hygiene Services. REACT has acquired certain capital equipment, for a small sum, from two separate businesses which have previously operated in these fields, and recruited a specialist in each area. REACT has created two new wholly-owned subsidiaries: REACT Environmental Services Ltd and REACT Occupational Hygiene Services Ltd, which will be able to offer a wider and complementary range of managed services to its growing client portfolio. Since REACT was admitted to AIM in August of this year, the Board has looked at a number of small add-on acquisitions to broaden the product offering and we are delighted to have been able to acquire the assets of these two former businesses, which fit perfectly with the outlined growth strategy. All of the subsidiaries' administration will be run out of REACT's Swadlincote offices, and the Board believes that over a short period of time it will see a positive contribution from both companies.
Red24 (LON:REDT 18.20p/£8.94m)
Red24, the crisis assistance company, announced that the leading international business underwriter, Hiscox London Market, has appointed Red24 to provide strategic support for its Product Contamination Insurance clients with immediate effect. Hiscox London Market, part of the Hiscox international specialist insurance group, has engaged Red24 to offer its crisis support services to aid their preparation and management of product safety risks. With its Food Safety and Product Recall business unit, Red24 will help Hiscox London Market clients prepare for risks relating to their products as well as respond to immediate crisis situations arising from product recalls and/or contamination. Support includes access to specialist technical, regulatory and public relations advisors, product testing facilities and crisis communications facilities.
redT energy (LON:RED 8.19p/£34.66m)
redT, the energy storage technology company, announced that its first manufactured unit is approved for connection to the UK grid and that units will receive the CE mark, enabling EU wide distribution. The 40kWh unit delivered to redT's Wokingham development centre is now grid tied, charging from and discharging into the distribution network. This marks an important step for redT moving from demonstration of prototype units to installation of independently manufactured products ready for customer use. This redT storage system has been coupled with solar as a grid connected installation. The system allows the redT development centre to match consumption of power generated from the solar panels installed on its rooftop with its demand, with the aim of saving on electricity purchase costs. Excess power from the panels and the redT system can be fed into the local electricity distribution network operated by Scottish and Southern Energy (SSE) so as to maximise sales revenues. SSE has approved connection of the solar and redT energy storage system to the local network. redT is currently executing a strategic programme to deliver market seeding products across a series of applications including utility, grid-tied wind, grid-tied solar, off-grid diesel generator and telecommunication towers. Now the first unit has been deployed, the Board expects to begin shipping units to other customers.