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This week: This week: Life tastes good for MDZ, Easy to SWAP, DDD in Las Vegas

Published: 09:11 08 Jan 2014 GMT

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The year ended positively for the major stock markets, with the FTSE gaining 300 points in the last two weeks of December to end 2013 at 6,746 while the All-share AIM Index added 23 points to end the year at 851. In the UK, the best performing sectors in 2013 were Autos & Parts, Fixed and Mobile Telcos, Forestry & Paper and Financial Services. The worst performers were Mining, Oil Equipment & Services, Tobacco, Electricity and Food Retailers. It has been a dull start to the new year for the main markets after disappointing US macro data and Chinese services PMI, which fell to the lowest level since August 2011 at 50.9. The small cap sector continues to outperform with the All-share AIM index rising a further 16 points so far this year to 867.  The economic calendar for the remainder of the week is busy and includes the release of US jobless claims and  the Bank of England interest rate decision.

AGL appointment to SAB,AAU EIA approved,COP appointment of Chairman,CPX company update,COMS multiple contract wins,CRA result of general meeting and open offer,CPP pre close announcement & board changes,CRAW trading update,DDD demos at CES 2014,DSN trading statement,EPO agreement with BoAML,ESG remittance JV,FUM licensing in Nordic Region,IFM trading update,IVO positive portfolio company news,JLP production and financing update,MDZ contract party confirmation and results,NETD trading update,SWAP agreement with SoEasyPay,MWE contract win,RLD placing and open offer,SHFT additional work awarded,SSP acquisition & placing,WTM business restructuring & director changes

ANGLE (LON:AGL)

Angle, the specialist medtech Company, announced the appointment of Dr Harold Swerdlow as a Scientific Adviser to the Company with immediate effect. Dr Swerdlow is Head of Research and Development for the Wellcome Trust Sanger Institute in Cambridgeshire and is a world-leading expert in next-generation sequencing. Previously, he was the Chief Technology Officer of Dolomite Ltd., a leader in microfluidics and microfabrication.

Ariana Resources (LON:AAU)

Ariana Resources, focused on exploration and development in Turkey, reported that further to the announcement released on 30 August 2013 regarding the submission of its final Environmental Impact Assessment (EIA) report for the Kiziltepe Sector of the Red Rabbit gold-silver project in Western Turkey, the Ministry of Environment and Urban Planning has now formally approved the EIA for the initial mine at Kiziltepe.  Ariana has reached a milestone achievement in the development of the Kiziltepe mine towards gold and silver production - targeted at 21,000oz of gold equivalent per annum.  Ariana's joint venture partner, Proccea Construction Co. will manage and finance the development, with construction commencing following receipt of final permits and mining anticipated to commence approximately six months after start-up.  Negotiations regarding debt financing for the remaining US$25m are at an advanced stage, which will provide a clear pathway towards production at Kiziltepe without additional dilution.  The project remains robust at the current gold price, with production cash costs estimated at US$600 per ounce of gold.  Resource expansion upside has already been demonstrated across the project area - recent results from on-going exploration programmes underpin the potential to double the current mineable resource-base of 448,000oz gold equivalent. 

CAP-XX (LON:CPX)

CAP-XX announced that it is ready to ship prototypes of its new surface mount supercapacitor to potential licencees. These surface mount devices are suited for applications for high volume devices, where re-flow solder board assembly is deployed, notably smart phones. The Company has employed an additional sales manager to cover Asia where it is experiencing growth in demand for its devices. He is a Korean national with experience in passive component sales including supercapacitors, in Asia, North America and Europe. Meanwhile, the Company is experiencing increasing interest from the US and India for its automotive supercapacitors and is in discussions on licensing. CAP-XX expects to report sales in A$ for the half year to December 31st 21 per cent ahead of the corresponding period of 2012/13. Cash is expected to be A$2.7m as at 31st December. Together with the cost reduction programme which continues to deliver savings and improved gross margin and a weakening A$, the Company is in line to meet market expectations for the half year and views the remainder of its financial year with confidence. 

Circle Oil (LON:COP)

Circle Oil, the international oil and gas exploration, development and production company, announced the appointment of Stephen Ian Jenkins, 55, as Chairman with effect from 6 January 2014.  Stephen was employed by Nautical Petroleum  from April 2005 to December 2012 and was CEO from April 2005 to August 2012 during which period he led Nautical through the AIM listing process in 2005, followed by a successful drilling programme in the North Sea, which featured a number of important oil discoveries and appraisals (including Kraken, Greater Catcher and Mariner), several fund raising and capital events and in August 2012, the successful sale of Nautical to Cairn Energy for £414m. 

Coms (LON:COMS)

Coms announced the recent award of a number of new contracts that focus on the delivery of its innovative connectivity and communication services. With work beginning early in the New Year, these contracts will start making a contribution to the Company during the year ending January 2015. In summary, the contracts awarded include a contract to supply telecommunications solutions including hardware, hosted seats and broadband to a brand new division of a blue-chip multinational company. Providing services to over 1000 users, this contract will be worth £850,000 per year. Another contract is a data centre project for a leading UK university worth £460,000, with the design process starting in Spring 2014 and an infrastructure project worth £330,000 at the headquarters of a major commercial law firm. Two other projects are an infrastructure project worth £250,000 for the London offices of an international bank, with installation scheduled for completion in March 2014 and a contract to supply 600+ broadband lines each month for the next 12 months, starting today with estimated annual revenues of £108,000. Dave Breith, CEO of Coms, commented: "We are delighted to announce the award of these contracts. Across our business, we are being chosen for our expertise and application of innovative techniques. These contracts enable Coms to start 2014 with confidence in our ability to deliver end to end communication and connectivity solutions to UK industry. We anticipate 2014 will be a transformational year for Coms and we look forward to announcing more contract wins as the year progresses." 

Corac Group (LON:CRA)

Further to the Company's announcement on 2 December 2013 detailing the Firm Placing to raise gross proceeds of £11.0m and the Open Offer to raise up to an additional £2.1m from new and existing investors, the Company confirmed that the Open Offer is now closed in accordance with its terms. The Company had received valid acceptances in respect of 4,524,078 Open Offer Shares, representing a take up of approximately 22 per cent of the total Open Offer Shares. In addition, the Board is also pleased to announce that at the General Meeting of the Company, all resolutions put to Shareholders in relation to the Firm Placing and Open Offer were duly passed. 

CPPGroup (LON:CPP)

CPPGroup published a statement prior to entering its close period for the year ended 31 December 2013. Underlying operating performance for the Group has continued in line with the trends outlined in the Group's Interim Management Statement, published on 30 October 2013. As previously stated, the operating environment continues to be challenging and the Group's performance for 2013 remains in line with previous guidance. The Group is in the early stages of repositioning the business and remains focused on realigning the business model and cost-base whilst successfully completing the proposed Scheme of Arrangement to review claims and, where appropriate, pay redress to customers. Significant risks and uncertainties remain in the short to medium term, particularly in relation to the Scheme, liquidity and the on-going challenges of the operating environment. Total costs and provisions made in the Group's financial statements for customer redress and associated costs have increased by £10.0m to £65.8m. This additional provision reflects the Group's latest estimate of customer redress and associated costs. Charles Gregson, Non Executive Chairman, has notified the Group of his intention to step down from the Board in due course. Charles will remain in post until an orderly succession and an appropriate handover has been completed. A process to identify a new Non Executive Chairman for the Group will commence immediately.

Crawshaw Group (LON:CRAW)

Crawshaw Group, the meat focussed retailer, provided an update on current trading.  On the 19th of November 2013, the company reported that their like for like sales for the seven weeks since 26th September were up 18 per cent.  Over the Christmas trading period, the company’s like for like sales for the seven weeks to 29th December 2013 were up 21 per cent, at a higher gross margin than before.  With a focus on cost control, the company now expects the out turn for the full year to end January 2014 to be materially higher than the current market forecast. The company also reported that on 25th November they opened a further retail outlet, in the new Sheffield covered market, which is trading positively, and that they are close to completing the lease on a retail premise, also in Sheffield.

DDD Group (LON:DDD

DDD Group, the 3D solutions and advanced imaging company, is hosting demonstrations of the latest TriDef powered 3D mobile and Smart TV apps and newest 2D video pre-processing solutions in a suite at the Venetian Hotel at the 2014 International CES, which opened on 7th January in Las Vegas. The latest solutions include a new TriDef 3D Smart TV app that enables popular 2D Android games to be downloaded and played in 3D on a 3D capable Smart TV. The app also enables normal video and photos to be converted to 3D automatically in a similar manner to DDD’s widely used PC and smartphone/tablet solutions. The new app will be demonstrated on a Smart TV system that has been provided by one of DDD’s Smart TV OEM partners based in China. DDD will also be demonstrating a new video pre-processing solution that has resulted from its partnership with InterDigital Inc. announced in September 2013. The solution will be demonstrated on both Smart TV and the latest Google Nexus 7 Android tablet and combines DDD’s depth-based video pre-processing with InterDigital’s adaptive streaming technology to deliver bandwidth savings in excess of 20 per cent when streaming 2D video to Smart TVs and smartphones/tablets. In addition, DDD is debuting two new products at CES 2014 aimed at the growing market for connecting PCs and mobile devices to Smart TVs and the increased use of social media to share video and game experiences.

Densitron Technologies (LON:DSN)

In August 2013, Densitron announced that it expected to achieve an operating profit ahead of that achieved in 2012. This expectation was based on production orders for business that at that time was in its pre-production phase. However, several of these projects have not converted into mass production as quickly as anticipated. As a consequence of this, there is a substantial profit shortfall in the UK as against previous management expectations. While it is still expected that the Group will remain profitable at an operating level, exceptional costs relating to the settlement of the lease dispute in Newcastle are such that the Company will report a loss for the current year. Operational improvements in the second half were insufficient to offset the loss incurred as a result of the Newcastle claim and the net loss for the period is expected to widen against the position described at the half year. Business in the US and Japan has been in line with or better than its expectations albeit that the contribution from Japan will be affected by the fall in the yen exchange rate against the US dollar. Jan Holmstrom, Chairman, commented: "2013 has been a difficult year for the Company. Challenging UK market conditions were compounded by costs of the settlement in relation to the property in Newcastle. Nevertheless the underlying business remains profitable operationally and with a strong pipeline we are optimistic for 2014." 

Earthport (LON:EPO

Earthport, the cross-border payments service provider, and Bank of America Merrill Lynch (BoAML), a leader in global payments and transaction services, have signed a multi-year agreement to expand BoAML’s low value clearing capabilities globally and to improve the efficiency of its high volume, low value payments. Earthport is already an existing key supplier to BoAML. The minimum revenue to Earthport is $11.3m, with the majority of the revenue anticipated within the first 30 months of the agreement. This follows an initial agreement with BoAML in December 2012 for a specific payments service in North America.

eServ Global (LON:ESG

eServGlobal, which offers mobile money solutions, has a formed a joint venture with MasterCard and BICS called HomeSend, which will enable consumers to send money to and from mobile money accounts, payment cards, bank accounts or cash outlets - regardless of their location or that of the recipient. The HomeSend JV will leverage the current HomeSend platform, a remittance hub based on eServGlobal technology and developed as part of a strategic partnership between eServGlobal and BICS. The HomeSend platform was first to market in offering international mobile remittances. Today, HomeSend has live deployments in fifty countries and commercial contracts with mobile network operators and money transfer operators that represent more than 1.2bn subscribers - the equivalent of one in seven of the world's population - and 200,000 cash agents respectively. 

Futura Medical (LON:FUM

Futura Medical, the healthcare company focused on advanced transdermal technology, has signed an exclusive licensing agreement with Sweden’s RFSU AB for the marketing and distribution of CSD500, Futura’s novel condom, in Sweden, Norway, Finland and Denmark. This agreement is in line with Futura’s strategy of licensing CSD500 to condom distributors that hold leading positions in their regions. RFSU AB is the market leader in the four Nordic countries included in this agreement. Regulatory authorisation in all of the countries included in this agreement is provided by CSD500’s CE mark, which was awarded earlier this year. Under the terms of the agreement, RFSU AB will hold the rights to manufacture, market and distribute CSD500 in Sweden, Norway, Finland and Denmark. The financial details of the agreement are not being disclosed although Futura will receive an upfront payment and royalties on all product sales along with certain minimum performance guarantees. 

Imperial Innovations Group (LON:IVO

Imperial Innovations announced that its portfolio company Cell Medica's cell therapy Cytovir ADV has been awarded a positive opinion by the European Medicines Agency's Committee for Orphan Medicinal Products. The EU's Orphan Medicinal Product Designation is designed to promote the development of drugs that may provide significant benefit to patients suffering from rare, life-threatening diseases. The designation also provides eligibility for protocol assistance, possible exemptions or reductions in regulatory fees during development, and ten years of market exclusivity from product launch in the EU.

Intandem Films (LON:IFM

Intandem Films, the London based international film group, has provided an update following the American Film Market (AFM), where the company marketed a number of new films from its growing slate. The company has grown its portfolio in recent months - with the number of films on its slate rising from nine in June 2013 to twenty in December 2013, eight of which are fully funded. Intandem remains fully focused on growing contracted sales, which feed through to earnings via fees and commissions. AFM is expected to result in standalone gross profits of approximately US$220,000. Total revenue to 23rd December 2013 reached c.£104,000 (unaudited) in the new financial year beginning 1 July 2013 which excludes AFM revenue expected to be recognised in H2.

Jubilee Platinum (LON:JLP)

Jubilee Platinum, the AIM and AltX quoted Mine-to-Metals specialist, announced that the Middelburg Smelter operation has achieved a new record production rate - more than 35 tons of Ferronickel metal within a single 24-hour shift - exceeding the previous record of 26 tons of metal. This follows the Company's recent announcement (dated 23 December 2013) that it had secured funding for the final phase of the smelter renewable program, which includes the expansion of the Middelburg Smelter operation to three operating  ARC furnaces.  Two of these furnaces will be dedicated to the production of ferronickel metal and the third furnace to the production of ferrosilicon metal, thereby increasing the total targeted smelter design capacity to 13,900 tons of metal per annum.  All three furnaces have been fully contracted.  With proceeds in place to fund the commissioning of the remaining third ARC furnace at Middelburg, the Board of Jubilee believes that the Middelburg Smelter is in a strong position to enhance its earnings profile. With a view to expanding its access to platinum containing material, Jubilee also announced that the Company has entered into a £10m Equity Finance Facility which can be used at the Company’s sole discretion, over a commitment period of 60 months. 

MediaZest (LON:MDZ)*

MediaZest, the creative audio-visual agency confirmed the end client for the large project announced by the Company on 10 April 2013 is The Coca-Cola Company. As previously stated, the project delivery is proceeding successfully and is scheduled to complete by the end of May 2014. Unaudited results for the six months ended 30 September 2013 were introduced also just before Christmas. On 13 December, the Company announced a conditional placing at 0.35p per share to raise £865,000 and a proposed issue of new shares through the conversion of loan interest amounting to £166,179 at a price of 0.35p per share. Revenue for the period was £1,572,000 (2012: £964,000) and the group made a loss for the period after taxation of £183,000 (2012: £239,000). Gross profit was £576,000 (2012: £461,000). The basic and fully diluted loss per share was 0.033 pence (2012: 0.073 pence). The results for the period reflect a significant improvement in revenue compared to the corresponding period last year. Top line revenue for the period increased 63 per cent; this growth was achieved through the large contract win detailed above, in addition to further work with existing customers such as Samsung, O2, Kuoni and JD Sports and new projects from growth areas such as the corporate market. The Group has made good progress in the last 12 months, and the recent placing will allow MediaZest to capitalise upon the opportunities before it, both in driving additional business and developing new products for which the Board believes there is a substantial market. 

MoneySwap (LON:SWAP)

MoneySwap, the provider of payment solutions to online and point of sale merchants licenced for UnionPay in the UK, announced that it has signed a Payment Service Provider (PSP) agreement with SoEasyPay Europe Limited, a leading global independent payment services provider.  The PSP Agreement, which will offer SoEasyPay customers UnionPay functionality through MoneySwap's UnionPay gateway, will provide the Company with access to SoEasyPay's established merchant base, as MoneySwap looks to capitalise on the rapid increase in Chinese consumer spending in the UK.  SoEasyPay is one of the major payment service providers on the international market, and has established a strong supplier base of banks in the UK and Europe.  Through the PSP Agreement, which is for an initial term of five years, SoEasyPay's merchants will now be able to process UnionPay transactions through MoneySwap's UnionPay gateway.  The UnionPay transactions will firstly be routed to the PSP gateway, then to MoneySwap's gateway, from which they will be directed to UnionPay; with a fee generated for MoneySwap for every transaction processed using the Company's payment gateways. 

MTI Wireless Edge (LON:MWE)

MTI Wireless Edge, the developer and manufacturer of sophisticated antennas and antenna systems, announced that it has received a US$1.0m order from a major customer of its Commercial Division.  The order is for delivery in 2014. The Company is also announced that its revenues for the year ended 31 December 2013 will be slightly ahead of market expectations.

NetDimensions (Holdings) Limited (LON:NETD

NetDimensions, provider of performance, knowledge, and learning management systems, gave a trading update for the 12 months to 31 December 2013. Sales revenue and invoiced sales for the period are likely to be substantially higher than for the prior year. The Company's management expect to report full-year 2013 GAAP revenue comfortably in excess of the consensus forecast of US$15.8m and to report invoiced sales of some US$17.6m. These results were helped by a particularly strong performance in the second half with both sales revenue and invoiced sales growing by more than 20 per cent from the second half of 2012. In addition, the full year loss before interest and certain non-cash items will likely be substantially lower than current market expectations. The Company ended 2013 with no debt, more than US$7.7m in cash and some US$6.6m in short-term receivables. The Board is particularly encouraged by the performance of the Company’s Software as a Service (SaaS) business. SaaS sales revenue in the period is likely to be in the region of US$6.1m (2012: US$4.5m), an increase of 36 per cent over the prior year. The shift to SaaS is a result of the Board’s strategy to position the Company as a primarily SaaS business with the benefits of more predictable recurring revenue and greater opportunities for up-selling. 

Richland Resources (LON:RLD

Richland Resources, the gemstones producer and developer, has announced that it is proposing to raise up to £4m (£3.9m net of expenses) through the issue of up to 118m shares by way of a Placing and Open Offer at an issue price of 3.4p. Minimum proceeds of £2m (before expenses) pursuant to the Placing and the shares has been committed by Directors and existing shareholders under the Open Offer. Minimum proceeds, together with cash and facilities and cash generated from operations will fund capital expenditure at the TanzaniteOne Mining Ltd. mine site to allow the restart of activities at two recently recovered mine shafts, fund expansion of operations and settle royalty claims and provide additional working capital. Additional proceeds, in excess of the minimum, would be applied towards an accelerated capital expenditure programme at the mine site and its diversification programme, including the development of the Tsavorite project and the potential option exercise over the sapphire project. The company has recently signed agreement with the State Mining Corporation (STAMICO) to aid endeavours to curb illegal mining operations.

Shaft Sinkers Holdings (LON:SHFT)

Shaft Sinkers, the international shaft sinking and underground construction group, announced it has been awarded additional work by Afplats on its existing Leeuwkop project. The scope of the work includes the continuation of sinking activities on the main shaft at Leeuwkop to a depth of 984m from the current level of approximately 700m. The contract, which commences immediately, is scheduled to be completed in June 2014 and has a total value of £2.2m. The contract is on a rates basis. Today's announcement follows a previous contract extension at Leeuwkop in August 2013 under which the Group introduced revised working practices that have resulted in cost savings for the client whilst also gaining significant time on the project schedule. The additional work is in line with management's expectations for new work and contract extensions, to be secured during the year. 

Solid State (LON:SSP)

Solid State, the supplier of specialist ruggedised computers, electronic components, antennae, microwave systems and battery power solutions, announced an acquisition and placing. The Company has agreed terms, to acquire the entire issued share capital of 2001 Electronic Components Limited (2K1) for an initial cash consideration of £2.0m with a further payment of up to £400,000, subject to an adjustment of net asset value on completion.  In its audited results for the year ended 31 December 2012, 2K1 reported turnover of £6.8m, an operating profit before management charge of £0.64m and a profit after tax of £59,000. In its management accounts to 30 September 2013 it had recorded turnover of £5.4m. One division of the 2K1 business, C1 Systems, is not being acquired. It contributes approximately £750,000 of turnover and makes a small loss. Solid State expects there to be immediate cost savings of circa £300,000 on the acquisition and that there will be the potential for other operational efficiencies in the medium term. The Directors expect that the acquisition of 2K1 will be earnings enhancing for the Group in FY 2014/2015. The Company also announced that it has raised approximately £2.54m (before expenses) through a placing at a price of £2.42 per share. 

Waterman Group (LON:WTM)

Waterman Group, the engineering and environmental consultancy, announced the restructuring of the way it manages its internal business reporting lines. The changes are fundamental to the Group's strategy to target a tripling of adjusted profit before tax over the next three years. The Board believes that this will simplify reporting and responsibilities within the business to give enhanced leadership and management to the two distinct halves of the Group. As part of this process, Simon Harden and John Waiting have agreed to step down as directors of the plc Board with immediate effect and have decided to leave Waterman on 31March 2014 to pursue other interests. In conjunction with the above changes to the plc Board, the former UK Management Board and the International Management Board will be replaced by a Property Management Board and an Infrastructure, Environment and Energy Management Board. The Property Board will be responsible for managing the Group's Structures and Building Services businesses in the UK, Australia, Ireland, Russia and Poland. The inaugural Chief Operating Officer of this Board will be Craig Beresford, who is currently Managing Director of the Structures business in the UK. The Infrastructure, Environment and Energy Board will be responsible for managing the Group's Energy, Environment, Civil and Transportation businesses. The inaugural Chief Operating Officer of this Board will be Neil Humphrey, who is currently Managing Director of the Energy, Environment and Design business.  

*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. 

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