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This week: Christmas comes early for MediaZest, Amara sees resource upgrade and Snoozebox wakes up with upbeat trading statement

Published: 15:04 17 Dec 2013 GMT

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The major stock markets are struggling to find any direction after further losses last week. The FTSE is down 13 points over the past week to 6,493 while the All-share AIM Index is off 5 points to 820. Comments from Draghi this week, when he reiterated ECB policy to support the recovery, has diverted attention, albeit briefly, from tapering concerns. Also, the Euro Area factory output is growing faster than expected, PMI rising to 52.7 in December, from 51.6 in November and above consensus of 51.9. The economic calendar this week is expected to confirm a strong recovery in other economies. The UK November Retail Sales is expected to grow by 2.2% year-on-year and the US Q3 GDP is forecast to show annualised growth of 3.6%. Not surprisingly, investors are nervous ahead of the start of the 2-day Fed meeting, where officials will discuss whether to slow the pace of its asset-buying program. 

AMA increased mineral resource,AGL sale of Geomerics,BEG half yearly report,CMX final results,CRU half yearly report,DEMG set up in Canada,EKT Q3 trading update,FITB £1,000,000 loan,IGE preliminary results,IVO IXICO launch,KWS trading update,MartinCo proposed AIM listing,MDZ placing, loan conversion,trading update,MoPowered intention to float on AIM,NMG extension for Rotgulden exploration licences,OUT placing,PEG contract extension,RVG trading update,SCLP patent grant in Japan,SEE first CAT dealer agreement,SCE trading update,ZZZ trading & strategic development update,TRK proposed placing and acquisition,TRX US distribution agreements,ZYT preliminary results

Amara Mining (LON:AMA

Amara Mining, the West African focused gold mining Company, has provided a 71 per cent increase in its NI 43-101 compliant mineral resource estimate following an update at its 100 per cent owned Yaoure Gold Project in Côte d’Ivoire. The Inferred Mineral Resource is now 5.5m ounces, representing an increase of 3.3m. The Indicated Mineral Resource has increased by 0.3m to 0.8m ounces. The mineral resource remains robust at a lower gold price and includes 0.4m ounces of oxide material, potentially amenable to low cost heap leach processing. Discovery costs are also highly competitive at US$3.50/oz versus average industry discovery cost in Africa of US$16/oz. Metallurgical testwork has confirmed the simple, non-refractory nature of the gold mineralisation and its amenability to a range of processing options - results received in Q3 2013 also demonstrate robust recoveries for low grade samples. The location of Yaoure is also highly advantageous due to close proximity to Kossou dam, which offers cheap hydro-electric power and abundant water, excellent roads and accommodation. The preliminary economic assessment is anticipated to be completed in Q1 2014.

ANGLE (LON:AGL

ANGLE, the specialist medtech company, will receive up to £6.2m through realising its investment in graphics technology developer Geomerics Ltd., which has been sold to ARM Holdings plc (LON:ARM 997p / £13.9bn), the world’s leading semiconductor intellectual property supplier. The sale of Geomerics completes ANGLE’s refocusing as a specialist medtech company and makes available additional financial resources for the Parsortix non-invasive cancer diagnostics business. £5.5m is receivable immediately and the balance of £0.7m is being held as a retention; payable on 12 December 2015. Since the year end, ANGLE has provided additional funding support of £0.5m to Geomerics so the net additional cash to be received by ANGLE compared to its year end balance is up to £5.7m. The transaction is expected to contribute a profit to ANGLE in the year to 30 April 2014 of up to £1.5m. ANGLE has also announced separately that it has received the CE Mark authorisation for its Parsortix cell separation system for use as an in vitro diagnostic device in the EU. Achievement of this key milestone confirms that the Parsorter PC1 clinical system meets the essential requirements of the European Union In Vitro Device Directive (98/79/EC), a pre-requisite for the product’s use in clinical applications (i.e. with patients) throughout Europe. The company is preparing an FDA 510(k) submission for clinical use of the Parsortix system in the US. 

Begbies Traynor Group (LON:BEG)

Begbies Traynor Group, a business recovery practice, announced its half year results for the six months ended 31 October 2013. Revenues fell to £22.3m (2012: £26.1m), profits before tax in the period held up at £2.0m (2012: £2.0m) and the interim dividend was maintained at 0.6p.  The Company reported that the insolvency market remains challenging, with a further reduction in UK corporate insolvency appointments in the calendar year to date. This reduced level of market activity led to lower insolvency appointments for the group, which combined with pressure on fee rates, caused the reduced revenue levels in the period. 

Catalyst Media Group (LON:CMX)

Catalyst Media announced the final results for the Company to 30 June 2013. CMG is a 20.54 per cent shareholder of Satellite Information Services (Holdings) Ltd (LON:SIS 66p / £12.88m ) and the results for the year to 30 June 2013 incorporate its share of the profits of SIS for its year ended 31 March 2013. The audited accounts show a profit before tax and impairment charges of £4.7m (2012 £4.3m) after including its 20.54 per cent equity share of profits in SIS. After taking account of an impairment charge of £8.4m, CMG recorded a loss of £3.7m before taxation. The loss arises from the decision by the Board to make a provision of £8.4m for the impairment of the value of the 20.54 per cent share in SIS as a result of its review of its investment in SIS following the loss of the outside broadcasting contract with the BBC. Net assets after that impairment review were £28.6m (2012: £36.1m) and net cash at 30 June 2013 was approximately £0.62m, and as at 9 December 2013 CMG had net cash of £0.58m. 

Coral Products (LON:CRU)

Coral Products, a specialist in the design, manufacture and supply of injection moulded plastic products, announced its half yearly report for the six months ended 31 October 2013. Sales and profit before tax were £9.41m (H2 2013£7.87m) with further improvement expected in the second half of FY2014. Profit before tax fell to £205k (H2 2013 £480k). While the result for the year to 30 April 2014 overall is expected to be ahead of FY2013, it is also expected to be significantly below market expectations. 

Deltex Medical (LON:DEMG)

Deltex announced that it has established Deltex Medical Canada as a joint venture with its current distributor, Provincial Medical Supplies. This is the first joint venture that Deltex Medical has established with one of its international distributors. It is designed to facilitate faster growth; pooling the margin on sales previously split between Deltex Medical and PMS will bring forward the time at which it will be economic to establish the clinical support programmes that drive deep, broad and sustainable adoption of CardioQ-ODM. Deltex Medical owns 51 per cent of the capital of Deltex Medical Canada and has the right to appoint three of its five directors. 

Elektron Technology (LON:EKT)

Elektron Technology provided an update on recent trading. The management reported that operations have stabilised and, as expected in the second half of the year, the sales backlog is improving. Selective price increases and reduced operating expenses are also being implemented. The Board expects to return to an operating profit before non-recurring or special items for the third financial quarter (H1 £0.1m loss). The unaudited loss before tax (after non-recurring or special items and finance costs) for the third quarter was materially smaller than the losses incurred in each of the first and second quarters of the current financial year (H1: £2.4m loss). At the end of November 2013, year to date sales (unaudited) on a continuing business represented 95 per cent of prior year continuing sales for the same period. This compares to 92 per cent as at the end of July 2013. Group order cover at 30 November 2013 of £10.1m was 133 per cent of the prior year's £7.6m. Net debt at 31 January 2014 will be higher than that reported at 31 July 2013 (£5.8m). As part of the rationalisation of its portfolio, on 4 November 2013, Elektron announced that it had completed the sales of its Chinese subsidiaries for a total cash consideration of approximately £0.3m. 

Fitbug Holdings (LON:FITB)*

Fitbug Holdings, the provider of online personal health and well-being services, announced that it has signed a £1m loan agreement with NW1 Investments Limited. The loan is repayable by 31 July 2014 and will accrue interest at a rate of 5 per cent per annum, payable on a quarterly basis. If during the term of the loan, Fitbug undertakes an equity issue, the loan Holder can elect to convert some of, or the entire loan into new ordinary shares in Fitbug. NW1 Investments Limited is a company in which the family of David Turner and Allan Fisher, both directors of Fitbug, have a material interest. Fergus Kee, Executive Chairman, said: “The Loan from this supportive party will help support the Company’s continued marketing and product development and in particular enable us to build our stock inventory ahead of the New Year and spring, which traditionally represent peak sales periods.  Additionally, we will be exhibiting once again at the Consumer Electronic Show held in Las Vegas in January, following the success of last year’s show and the recent commercial launch of our Fitbug Orb.”  

Image Scan Holdings (LON:IGE)

Image Scan Holdings announced preliminary results for the year ended 30 September 2013; a period that, whilst loss-making, has seen the broadening of the product base by incremental development, profitability restored in the second half of the year and a significantly increased order intake. Profitability was restored in H2 with a profit of £92,000, resulting in an overall loss for the year of £297,000 (2012: profit £108,000). The annual order intake was up 32 per cent to £3.3m (2012: £2.5m). Revenues came in at £2.5m (2012: £4.3m) with a gross margin of 37 per cent (2012: 38 per cent). The underlying gross margin, excluding exceptional nuclear costs, was 43 per cent. Overheads were down 20 per cent to £1.3m (2012: £1.6m). Cumulative orders deliverable in H1 2014 of £1.4m were noted post period end. The current cash balance is £428,000. Brian Emslie, Chairman of Image Scan, commented: "Having operated at break-even in four of the last five half year periods, it is disappointing to report a loss for 2013. Much of the loss derived from exceptional costs relating to a one-off contract that was taken three years ago in very difficult economic conditions when the Company was in need of additional revenue. "Over the last four years the Company has made progress to stem the historic losses and reposition the Company to focus on sales of standard equipment. Broadening the product base has been achieved entirely through incremental development given limited cash availability. Having stabilised the Company, the Board is now considering what actions and investments need to take place for the Company to make a significant step-change."

Imperial Innovations (LON:IVO)

Imperial Innovation announced its portfolio company IXICO (LON:IXI), the brain health company, of the launch of its first CE marked medical device. This is to be marketed as Assessa(TM) and comprises a digital healthcare platform to support the diagnosis of dementia. IXICO and InHealth Limited, a major supplier of diagnostic and healthcare services to the NHS and private health providers, have also signed heads of terms to explore opportunities to provide Assessa(TM) and complementary services within the UK and Eire. The product launch and widened collaboration with InHealth Limited coincided with the gathering of the world's health ministers in London for the G8 Dementia Summit.

Keywords Studios (LON:KWS

Keywords Studios, the international technical services provider to the global video games industry, announced an update on trading following the launches of both the Xbox One and the PlayStation4 (PS4) in the past weeks.  Following the Group's announcement on 20 September 2013, the Board confirms that revenue and profits for 2013 will be in line with revised market expectations.  The launches of the Xbox One and PS4 have been successful, with both consoles reported to have outstripped the initial sales performances achieved during the launches of Xbox 360 and PS3. Industry commentators believe that this performance indicates that the new generation consoles will surpass the sales of the previous generation within a considerably shorter cycle.  This revitalisation of the console sector has come at a time when the industry is also being driven by substantial growth in smartphone gaming, where Keywords are strongly represented through the support of leading players such as King, Supercell, Disney, Kixeye and Zynga.  Approximately 60 per cent of Keywords Studios' revenues are derived from the console games market.   The Group has continued to gain market share in this segment during the current financial year and has worked on over half of all the launch titles for the PS4 and Xbox One platforms. The Group has also continued to make strong progress in working on additional titles from its existing blue-chip client base in mobile, social and online gaming.

MartinCo (TBC)

MartinCo, operator of one of the UK’s largest residential lettings businesses, recently announced its intention to come to AIM via an IPO.  MartinCo operates one of the UK's largest residential letting businesses. The Group comprises 152 franchise owners trading at 187 offices, with a further two trading offices which are currently Company owned. The Group's franchisees manage approximately 30,000 properties on behalf of private clients and agreed over 25,000 lettings in the year to 31 December 2012. The Group recently added an estate agency service to the franchise and 95 of its franchise offices are now licensed to offer this service.

MediaZest (LON:MDZ)*

MediaZest, the creative digital out-of-home advertising company, announced that it has conditionally raised £865,000 (before expenses) through a placing. In addition, it proposes to issue shares through the conversion of loan interest amounting to £166,179, in each case at a price of 0.35p per share. The price represents an approximate 11.4 per cent. discount to the closing mid-market price on 12 December 2013. The Group has made progress in the last 12 months through winning a significant contract with a large multinational brand. This development has enabled the Group to improve its financial performance and provides numerous ongoing opportunities over the coming years. Consequently the Board believes that further investment is required to take advantage of the opportunities before it. In particular, the Board believes it is in the best interests of the Company and shareholders as a whole to raise additional funding in order to retire a further proportion of shareholder loans. As at 11 December 2013, the Group had aggregate loan principal and interest indebtedness of £546,179. These loans carry annual interest rate coupons of between 10 per cent. and 20 per cent. Interest payments in the last financial year ended 31 March 2013 amounted to £138,000, a substantial proportion of the Group's cost base. The Board proposes to reduce this cost and significantly improve financial performance by repaying £180,000 of the outstanding principal and converting outstanding interest of £166,179 into new shares at the issue price. This will leave the Company with an outstanding loan of £200,000 (versus £530,000 of total shareholder loan principal at the beginning of the financial year, 1 April 2013). The Board has identified three key areas in which it believes product development will deliver a new solution that will allow the Company to achieve improved sales results. £100,000 is expected to be invested in development of these products: Unique holographic solutions: Shelf edge solutions and Audience measurement software. Over the previous nine months, the Company has invested significantly in recruiting additional sales and marketing personnel, and opened a London showroom in order to allow customers to view the MediaZest product range more easily. The balance of the net cash proceeds of £495,000 will be used for working capital and to allow for additional marketing too. The Company raised £115,000 more than originally planned and will allocate such amount towards potentially paying down further debt in addition to financing the ongoing expansion of the business in line with the stated plan. The Company intends to announce its unaudited interim results for the six months ended 30 September 2013 by 20 December 2013. The Board expects to report revenue for the six months ended 30 September 2013 in the region of £1,572,000 (2012 - £964,000), gross margin of approximately £576,000 (2012 - £461,000) and a loss for the period, after taxation, of approximately £183,000 (2012 - £239,000 loss). EBITDA is expected to be a loss of approximately £98,000 (2012 - £164,000 loss) before interest and finance costs of £77,000 (2012 - £55,000). These results reflect the heavy investment that the Group has made in sales and marketing resources during the period. 

MoPowered (TBC)

MoPowered, a leading mobile commerce enabler, recently announced its intention to come to AIM via an IPO.  The MoPowered Group has developed and offers a 'Software-as-a-Service' (SaaS) platform which works with online retailers and e-commerce businesses to enable fully transactional mobile commerce (the MoPowered Platform).  The MoPowered Group's main country of operation is the United Kingdom.  The MoPowered Platform enables its clients to benefit from the attractive growth opportunities arising from the increasing levels of mobile device-initiated internet traffic hitting their websites.  The MoPowered Platform sits alongside a client's e-commerce offering and provides a browsing, checkout and payment experience for consumers which is tailored primarily for smartphone users (and, to a lesser extent, tablet users) with the objective of significantly increasing mobile conversion rates and associated revenues.  The MoPowered Platform is already operating at scale, having processed in excess of one million of mobile transactions in the last year and now has over 100 contracted clients. Key referral agreements are in place with certain payment processing companies who, between them, provide payment services to over 80 per cent. of UK online merchants. The business model is predominantly based on long-term contracted, recurring revenues.  

Noricum Gold (LON:NMG)

Noricum Gold Limited, the Austrian focused gold exploration and development Company, announced that it has been granted a five year extension for the Rotgulden exploration licences by the Austrian mining authority, the Federal Ministry of Economic Affairs, Family and Youth.   The area covered by these licences includes the previously producing Rotgulden underground mine, where a drill programme has recently been completed, and the prospective Altenberg target area located 2km to the south of the mine.  The remaining 206 licences at Rotgulden have an expiry date of 31 December 2015.  In accordance with Austrian mining law, the company has already completed sufficient exploration work at these licences to enable it to apply for a further five year extension in 2015.

Outsourcery (LON:OUT

Outsourcery, the pure-play provider of cloud-based IT and unified communications services (ICT), has placed 3.75m new shares at 112p per share to raise £4.2m (before expenses). The purpose of the placing is to fund the company’s deployment of a CESG IL3-compliant platform, based on its existing O-Cloud, in order to access a new and significant opportunity for the company’s cloud services which is being driven by UK Government policy and security compliance requirements. In May 2013 the UK Government introduced a Public Cloud First Policy which means that Government departments are now mandated to consider cloud solutions as a preferred option in any IT procurement. It also wishes to see more flexible contracts and the involvement of UK SMEs in the delivery of these services.  Such policies are designed to reduce reliance on the large systems integrators and IT service companies by reducing ‘lock-in’ and to materially reduce the costs of UK Central Government ICT as contracts are renewed. On 23 September 2013, Outsourcery announced plans to deploy a new platform, supported by Microsoft Corporation, to provide secure, cloud-based infrastructure services and applications to UK Central Government end-customers and commercial sector organisations with similar security requirements (IL3 O-Cloud). On 6 November 2013, Outsourcery announced that it would be partnering with Dell to design and deploy the compute, storage and networking infrastructure for the IL3 O-Cloud, with Dell as a strategic go-to-market partner and established provider of technology to the UK Central Government.

Petards Group (LON:PEG)*

Petards, the developer of advanced security and surveillance systems, announced that the Ministry of Defence (MOD) has extended its contract for the provision of engineering services in respect of electronic countermeasures equipment. The contract extension, which is worth in the region of £0.75m, has been extended until December 2015 and is for the provision of technical support services related to the electronic countermeasure systems fitted to various aircraft types within the MOD's fleet. Petards Chairman Raschid Abdullah said: "We are very pleased that the MOD has awarded this contract extension which we consider to be recognition of the high level of customer service and experience that Petards provides in supporting their requirements in this specialist field."

Retroscreen (LON:RVG)

Retroscreen, the viral challenge and "virometrics" specialist, announced a trading update ahead of its year end.  The Company expects to report revenues for the year ending 31 December 2013 in excess of £27.0m (Year ended 31 December 2012: £14.4m), significantly ahead of market expectations.  The Company is also continuing to achieve improvements to gross margin and profitability.  Significant revenue growth is being achieved from Retroscreen's solid pipeline of Viral Challenge Model (VCM) client engagements, which are now running in two facilities and with Retroscreen delivery of client engagements moving in parallel streams through the VCM phases of protocol design (and ethics approval), volunteer recruitment and viral challenge quarantines.  The revenue growth is principally due to the increased number of client engagements and quarantines conducted during 2013, together with the study set-up and volunteer recruitment for a number of new VCM engagements with quarantines due to commence in 2014.

Scancell Holdings (LON:SCLP

Scancell Holdings, the developer of novel immunotherapies for the treatment of cancer, has announced that a patent for its DNA ImmunoBody® technology has been granted in Japan.  This key patent follows approval in Australia earlier this year and adds to Scancell’s growing body of intellectual property for its ImmunoBody® platform.  Scancell’s protein ImmunoBody® patent has already been approved in the US, Europe, Japan and Australia. 

Seeing Machines (LON:SEE

Seeing Machines, a technology Company that specialises in visual computing systems that track faces, eye and facial features in real time, has reported that Wagner Equipment Co. has become the first Caterpillar distributor for its Driver Safety System (DSS). The DSS technology and services are to be sold to customers in the mining industry exclusively through CAT(R)dealers. Seeing Machines' agreement with Wagner ensures that Wagner's mining customers will now have access to the experienced DSS sales and high standards of technical support they have come to expect from Wagner in Colorado, New Mexico and Texas. There are over 20 CAT(R) dealers in the process of becoming Seeing Machines distributors and further updates are expected as the distribution agreements are executed.  

Snoozebox Holdings (LON:ZZZ)

Snoozebox Holdings, provider of portable hotel accommodation and services, announced the outcome of the business review undertaken by the new executive team appointed in the second quarter of this year, led by David Morrison, Chairman. Commenting on the outcome of the review, David Morrison said: "I am pleased to report that the changes implemented by the new management team are leading to a turnaround of operating performance of the Company and have resulted in a positive contribution to central overheads in the third quarter, compared to the losses reported in the first half of the year.”  The immediate focus of the new management team has been to stabilise the business and position it for growth. The Company reported that it will see around an 80 per cent growth in revenues in 2013 to approximately £6.5m and net cash in excess of £4m at the year-end, in line with expectations. 

Surface Transforms (LON:SCE)

Surface Transforms announced that trading in the six months ended 30 November 2013 was in line with management's expectations. Turnover for the period was £558k (2012: £405k) being a significant 38 per cent higher than the corresponding period last year with the technology transfer agreement and race car markets contributing to the growth. Cash at the period end was £375k (2012: £391k). The Company expects to report the interim results for the six months ended 30 November 2013 in January 2014. 

Tissue Regenix (LON:TRX)

Tissue Regenix, the regenerative medical devices Company, announced that it has signed seven independent regional sales distribution agreements in the United States. The regional distributors' represent over forty sales representatives that will actively promote DermaPure™, Tissue Regenix's dCELL® human dermis into acute care hospitals, Veteran Affairs (VA) Hospitals and institutions as well as Long Term Acute Care hospitals (LTACs)  in the US.  With the aim of targeting all the states within the US, Tissue Regenix intends to sign further distribution agreements to ensure sales coverage exists in all US metropolitan areas by the end 2014. DermaPure™ also remains on course for its commercial launch in the US during the first three months of 2014.  Tissue Regenix established its US subsidiary 'Tissue Regenix Wound Care Inc.' in November 2012, as part of its commercialisation strategy for its dCELL® technology platform.  In June this year the operation signed a processing agreement with Community Tissue Services (CTS), one of the largest tissue banks in North America. The partnership with CTS and the new distribution groups is allowing Tissue Regenix to target the existing $1.4bn market for wound healing devices & equipment, which is anticipated to reach $1.5bn by 2016.  Tissue Regenix's DermaPure™ works by taking human donor skin and removing the DNA and cells, using the patented dCELL® process to leave a natural biological scaffold that can be placed in the wound to aid natural healing by attracting the patient's own cells to the wound area.

Torotrak (LON:TRK)

Torotrak, a developer and supplier of emissions reduction and fuel efficiency technology for vehicles, announced that it has entered into an acquisition agreement to acquire, subject to shareholder approval, the remaining 80 per cent of the issued ordinary shares in Flybrid for a maximum consideration of up to £23.0m, of which £15.0m is subject to performance targets. In addition, the Company announced that it has conditionally raised funds of £16.0m (before expenses) by way of an equity fundraising at an issue price of 18 pence per share, comprising a firm placing, a placing and open offer and a subscription by Allison Transmission, Inc. The net proceeds of the issue will be used to finance the initial cash consideration payable in connection with the acquisition, to finance the investment required for the commercialisation of Flybrid's first manufactured product for the commercial vehicle market and to finance the on-going design, development and testing of Torotrak's V-Charge technology and Flybrid's M-KERS technology for the passenger car markets, as well as enhancing Torotrak's testing and engineering capabilities. 

 Zytronic (LON:ZYT)

Zytronic, a specialist manufacturer of touch sensors, announced its preliminary results for the year ended 30 September 2013. Touch revenue accounts for 73 per cent (2012: 71 per cent) of group revenue of £17.3m (2012: £20.4m). The gross profit margin decreased to 28.4 per cent from 36.3 per cent in 2012. There was an improvement in the second half underlying pre-tax profit of £1.6m versus £0.8m in the first half, totalling £2.4m underlying pre-tax profit for the year. Net cash balances increased by £1.3m to £5.5m and the total dividend for the year increased by 7.1 per cent to 9.1p (2012: 8.5p). Commenting on the results, Chairman, Tudor Davies said: "The first two months of the current financial year have seen a continuation of the improved margins and order intake experienced in the second half last year, and as long as the benefits from the trend towards touch sensor products continue, performance should improve this year." 

*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. 

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