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This week: Bagir lost in the jungle, Angel partnership for HaloSource, Trading in line for the Brady bunch

Last updated: 16:54 23 Jul 2014 BST, First published: 15:54 23 Jul 2014 BST

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BAGR trading update, BRY trading update, CRU preliminary results, DDDD acquisition, DJI Holdings admission to AIM, EHP pre-close trading update and investment, GTS Chemical Holdings intention to float on AIM, HALO Rain for Rent alliance, HAYD announced distribution agreement, HYDG trading statement, KLBT expands operations, IGE contract wins, IGE supply agreement, IPP trading update, MANX 4G launch update, NET trading update, SPSYcontract wins

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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. 

Bagir Group (LON:BAGR)

Bagir Group, a designer, creator and provider of innovative formalwear tailoring, provided a following update on its half year results to 30 June 2014.  Bagir expects its results for the six months to 30 June 2014 will show revenue of approximately $48m, EBITDA of approximately $1.6m and a loss before tax of approximately $2m. EBITDA and loss before tax exclude IPO costs of $0.3m which are to be charged against earnings. Net debt at 30 June 2014 was approximately $9m.  The Company's trading statement on 15 May 2014 reported that it expected revenue for the year ending 31 December 2014 to be approximately $100m to $104m, with EBITDA of approximately $4m to $6m. While in line with the previous estimates, the Company expects the full year results to be at the lower end of these ranges.  It is anticipated that the half year results will be published on or around 11 September 2014.

Brady (LON:BRY)

Brady, the leading global provider of commodity, energy and recycling software for transaction processing and risk management, provided a trading update for the half year to 30 June 2014. Trading for the first half of the year has been in line with management's expectations, delivering strong earnings growth compared with the first half last year. The Group remains on track to deliver full year results in line with market expectations. The Energy business unit has made substantial progress in signing seven deals in the period, including the migration of three clients to the go-forward platform, which actively endorses the Group product strategy. The business has also significantly reduced its cost base compared to the corresponding period last year. The Commodities business unit has remained focused on delivering its significant projects and recognising its backlog revenue. The Recycling business unit has shown strong growth, having signed three new customers and successfully delivering two major projects. Full details of the Group's financial performance for the period will be provided in the Interim Results, which are expected to be announced on 9 September 2014. 

Coral Products (LON:CRU

Coral Products, a specialist in the design, manufacture and supply of injection moulded plastic products based in Haydock, Merseyside, has recently announced its preliminary results for the year ended 30th April 2014.  In relation to their key financials, their operating profit has increased by 33.9 per cent to £664,000 from £496,000 in 2013, with an EPS increase of 12 per cent to 1.21p from 1.08p.  General performance is on the increase such as sales, operating cash flow and revenues.  Additionally a ten year agreement has been signed with a leading national on-line retailer for a range of totes expected to generate revenues of £8m over the first two years.  Furthermore a proposed final dividend of 0.5p reflects the boards’ confidence.

4d Pharma (LON:DDDD)

The pharmaceutical company focusing on significant new therapeutic areas has announced the acquisition of Microbiota, for an effective consideration of £2.04m. Microbiota is a new company that was formed to acquire and develop a patented bacteria aimed at treating irritable bowel syndrome and related symptoms, which was developed by the French National Institute for Agricultural Research (INRA). The company has not yet traded and therefore has no historical profit or losses. Duncan Peyton, Chief Executive Officer of 4d pharma commented: "4d pharma continues to work exclusively in the new drug class of live biotherapeutics. This acquisition further complements our unique platform technology and strengthens our portfolio of drug candidates in development, which we believe could transform treatment options for patients by addressing the underlying causes of disease.”

DJI Holdings 

DJI Holdings, which operates through its subsidiaries as a licensed and authorised distributor and promoter of regulated lottery products in the rapidly expanding Chinese lottery market, is to be admitted to AIM with a market capitalisation of approximately £130.5m.  DJI has raised £9.0m through a placing of new ordinary shares and a further £6.0m through an issuance of convertible loan notes.  Dealings in the Company's shares are expected to commence on 24 July 2014.  DJI and its affiliates and subsidiaries is a licensed and authorised distributor and promoter of regulated lottery products in the expanding Chinese lottery market. The Group's strategy is to capitalise on the opportunity to deliver lottery ticket fulfilment sales to its substantial client base of large Chinese corporations (B2B) and individual consumers via the Group's owned and operated websites (B2C) within the online and mobile environment.  Through the Group's long-standing relationships with the Chinese regulators, portfolio of lottery contracts and reliable technology platform, the directors believe the Group is well-positioned to capture the market opportunity.  The principal activities of the Group are the development, promotion and distribution of authorised lottery products in China. DJI's subsidiaries are licensed and/or contractually authorised to distribute and promote Sports and Welfare lottery products online, via mobile and through physical retail outlets across China.

Epistem Holdings (LON:EHP)

Epistem, the personalised medicine and biotechnology Company, announced a pre-close trading statement for the year ended 30th June 2014. Income over the full year remained solid and broadly in line with market expectations, with EBITDA losses expected to be around £2.5m reflecting the growing expenditure in preparation for launch of the Company’s first product Genedrive®. Net cash at 30th June 2014 was £4.2m. The Company expects to release its final results for the year ended 30th June 2014 on Tuesday 28th October 2014. Epistem also announced that it has entered into a collaborative funding agreement with the Global Health Investment Fund I, LLC (GHIF) to support the roll-out of its Genedrive® molecular diagnostic platform as the company’s tuberculosis assay enters pivotal field trials in key developing world locations. Under the terms of the agreement, Epistem has issued to the GHIF a five-year convertible bond totaling $8.0m (GBP4.7m) (the Bond). The GHIF is an investment fund designed to provide financing to commercialise new and improved tools to fight challenges such as tuberculosis, malaria, HIV/Aids and maternal and infant mortality in the world’s poorest countries, capitalised by individual investors’ private foundations, institutional investors, three leading pharmaceutical companies, a multilateral development bank and the Governments of Canada and Germany, with the benefit of a partial guarantee from the Bill & Melinda Gates Foundation and the Swedish International  Development Cooperation Agency. The Bond was issued at par and has an annual coupon of 5 per cent commencing from 21 January 2015.  Interest is payable semi-annually in arrears and the Bond matures on 21 July 2019, unless previously converted into fully-paid ordinary shares of Epistem.

GTS Chemical Holdings (TBC)

GTS Chemical Holdings, the specialty chemicals producer and largest Chinese manufacturer of ammonium sulfite, recently announced its intention to float on AIM. The Company utilises waste products from the fertilising and coking industries to manufacture specialty chemicals. These chemical products are in turn used in the sustainable manufacture of paper from waste materials. In order to expand the Company's production capacity to enable it to meet anticipated additional customer demand, the majority of which is contracted.  GTS is an established, profitable and fast growing specialty chemical producer.  It is the largest producer of ammonium sulfite in China, representing 34.8 per cent. of Chinese output in 2013. Ammonium sulfite is a key feedstock for the growing straw based paper manufacturing industry, which is supported by the Government to address, in part, the environmental impact of the disposal of 700m tons of straw produced annually.  GTS's revenue has grown from RMB 174.2m in 2011 to RMB 482.9m in 2013, a compound annual growth rate of 66.5 per cent. Over the same period, gross profit has risen from RMB 36.7m to RMB 102.4m, a compound annual growth rate of 67.0 per cent.

HaloSource, Inc. (LON:HALO)

HaloSource®, the clean water and antimicrobial technology company, and Rain for Rent® announced that they have signed a strategic partnership to provide customers with enhanced water filtration solutions. This alliance delivers customers a single source solution that cost effectively meets water discharge standards on their jobsites in an environmentally responsible way. The HaloKlear® portfolio of eco-friendly polymer technologies addresses a wide variety of pollutants and contaminant types including total suspended solids, algae, hydrocarbons, heavy metals, oils and organic compounds.  The strategic partnership is targeting a significant share of the $1.9bn domestic market for flocculent chemicals, focused in construction, environmental, simple mining and industrial applications. Strategies to win more of that business include digital marketing targeting new and existing Rain for Rent customers, lead sharing and cobranding proposals and marketing materials. HaloSource estimates annual revenues of USD 500,000 will be achieved from this Alliance. Rain for Rent’s specialty is delivering complete water management systems including pumps, pipe, tanks and filtration backed by engineering and sales expertise. 

Haydale Graphene Industries (LON:HAYD)                      

Haydale Graphene Industries, the Company focused on enabling technology for the commercialisation of graphene, announced it has entered into a distribution agreement with Goodfellow Cambridge Limited, widely regarded as one of the premier global distributors of advanced materials for R&D, prototyping and specialised manufacturing.  The Agreement is a rolling annual contract and will focus on the global marketing and distribution of Haydale HDPlas® functionalised graphene nanoplatelets (GNPs) to major research and industrial clients through Goodfellow's international network.

Hydrogen Group (LON:HYDG)

Hydrogen Group gave an update on trading for the six months ended 30 June 2014. As reported in the AGM Statement in May, the underlying levels of activity in terms of vacancies and interviews has been strong, however the Group has experienced delay in the conversion of activity into placements and Net Fee Income (NFI). In addition, the strength of Sterling has had an adverse impact on reported NFI compared with the first half of 2013. As a result, the Group now expects NFI for the period to 30 June to be lower than in the same period last year by around 7 per cent. Management has undertaken a comprehensive restructuring of the business with the aim of increasing profitability. Implementation of the changes was substantially complete by the end of June. The Group will report an exceptional item for non-recurring costs associated with the changes. Exceptional costs for the full year are currently expected to be in the region of £1.8m. The business has remained cash generative in the period and control of working capital remains strong. 

Image Scan Holdings (LON:IGE)

The supplier of x-ray screening systems to the security and industrial inspection markets announced that it has signed an exclusive supply agreement with a leading global provider of x-ray inspection solutions based in the US. Under the terms of the agreement, Image Scan will be supplied with a specially designed, portable x-ray generator, which is a significant component in the Company's FlatScan product range which is offered to bomb disposal and counter-terrorism customers throughout the world. The agreement provides Image Scan with exclusive rights to market the product in the security sector. This is part of the company’s strategy of targeting the portable market. The aim is to target new markets including those in North America and new product launches are anticipated.  Additionally IGE has announced that it has signed new contracts totalling £92,400 to provide its security products to organisations in the emerging Asian markets. The contracts demonstrate the successful extension of the Company's global reach and marketing across the region.  The AXIS-64 conveyor x-ray systems will be installed as part of a suite of screening equipment at a new national strategic facility that will be subject to the highest security protection within Myanmar. The AXIS-64 system has been chosen after a validation and testing programme where its UK build quality was a significant factor in the selection criteria.  The Company's FlatScan hand portable x-ray system will be supplied into Vietnam and Bangladesh for the first time. The multi-unit contracts for military customers will see the end users in these territories utilise hand portable digital x-ray systems that are back-packable and quick to deploy. The FlatScan's inherent wireless characteristic was key to securing contracts with these customers; alternative systems often involve carrying separate wireless network or repeater devices. These FlatScan units will also take advantage of the latest software developments where the systems use colour to differentiate between differing material compositions. The colour demarcations will enable users to quickly and more accurately determine the makeup and hence potential threat of the item that has been x-ray inspected.

IPPlus (LON:IPP)

IPPlus, the Ipswich based services’ company covering call centre services, call centre software, archiving, disaster recovery, telephony and payment card industry (PCI) compliant solutions, provided a trading update for the financial year ended 30 June 2014. While the performance of the Group's different businesses has been mixed, the Board is pleased to be able to report that it expects IPPlus to report revenue of £9.1m and profit before tax of £0.5m for the full year (2013: £8.1m and £0.35m respectively). The substantially improved headline performance for 2014 does, however, include a one-off profit on lease surrender of £0.35m. CEO, William Catchpole said: "It has been an excellent year for our call centre business whilst the prospects for our PCI solution and its sales pipeline are most encouraging. It is of course frustrating to have seen a reduction in the software divisional sales in the year, however, we anticipate that this will recover its momentum as the CallScripter software is a market leader utilised in call centres around the world. The Group has good recurring revenue and an adequate capital position. The Board remains confident that the Company has good prospects ahead." 

Kalibrate Technologies (LON:KLBT)

Kalibrate Technologies announced a major expansion of its operations in Asia-Pacific, which is in-line with its growth strategy, to expand the Group's business into emerging, high-growth regions and to take advantage of the trend in deregulation of fuel pricing in this region. To service its existing client base and provide the resources to grow the Group's business in the region, Kalibrate will open offices in Melbourne and Bangkok within the next three months. This will expand the Group's regional footprint to six offices, complementing its existing presence in Mumbai, Seoul, Shanghai and Tokyo. The Melbourne office will also be part of a 24/7 global support service for clients ensuring that all times zones are covered by daytime hours. 

Manx Telecom (LON:MANX)

The leading communication solutions provider on the Isle of Man announced that it will launch the Isle of Man's first 4G mobile network on 29 July 2014. In addition, the Company also announces that cyclist Mark Cavendish MBE will be an official ambassador for Manx Telecom's 4G network. Cavendish will feature in advertising campaigns for the Company over the coming months and use the network when he is on the island.  The new 4G network, which is predicted to cover 95 per cent of the Island's population, will enable customers to experience speeds up to seven times faster than on the company's 3G network and will have the added benefit of providing better 2G and 3G mobile coverage on the Isle of Man. The service will automatically be included in the tariff plans for Manx Telecom customers who are on a 'pay monthly' smartphone plan and with a 4G ready handset.

Netcall (LON:NET)

The customer engagement software provider has given a trading update for the year ending 30 June 2014. The Group has continued to perform well in H2 and the Board anticipates FY trading results will be comfortably in line with market expectations. Netcall has seen strong demand for its Liberty Customer Engagement platform with double digit percentage growth in orders from existing and new customers. The Group maintained a strong cash position and a debt free balance sheet. At 30 June 2014 the net cash balance had increased to £11.4m (31 December 2013: £10.0m). Henrik Bang, CEO of Netcall commented: "We continued to see double digit new sales order growth from both existing and new customers including the first orders for our new social media and PCI payment solutions.”  The results are scheduled for 23 September.

Spectra Systems Corporation (LON:SPSY)

Spectra Systems reported that it has executed contracts with two suppliers of product authentication services in Asia for its Smartphone based technology for authentication of retail products. The licenses are non-exclusive in the People's Republic of China and exclusive in Korea. The agreements include recurring license fees and minimum annual order quantities for materials supplied by Spectra. Together, the minimums and license fees will add over $100,000 of contribution to the Company in 2015 with significant growth potential. One of the contracts includes options for cloud-based authentication and data mining services which would be provided by Spectra’s Secure Transactions Group in Vancouver, creating value from the synergistic combination of its software expertise and established physical authentication capabilities. 

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