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A golden first for Serabi, Bacanora leading the charge for mining IPOs, ULS AIM’s newest resident

Last updated: 16:31 01 Aug 2014 BST, First published: 15:31 01 Aug 2014 BST

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AGL preliminary results, BCN first day of dealings, BGO Etisalat partnership expanded, BVM trading, CDOG pre-close trading update, HCM reports results, EYE trading update, EPWN first day of dealings, FITB secures £1,750,000 loan, MGR HY trading update, MPOW launches 3DS, PNA Q1 trading statement, SRB commercial production and Q2 operations update, SDM acquisition, SML operational and corporate update, ULS first day of dealings

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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. 

ANGLE (LON:AGL)

ANGLE, the specialist medtech company, announced results for the year ending 30th April. Losses were £1.2m vs £1m in FY2013. Highlights include the sale of Geomerics for £6.2m strengthening the balance sheet, and the Parsortix system successfully deployed with key opinion leaders, namely the University of Surrey Oncology Group, Cancer Research UK Manchester Institute and Medical Research Council's Cancer Unit at the University of Cambridge where a laboratory is being established. The cell separation platform is being developed as a diagnostic tool for personalised cancer care. During the period it was CE mark authorised and an FDA submission was made in March 2014. 

Bacanora Minerals (LON:BCN

Bacanora Minerals, the Canadian resources company with assets in Mexico, recently announced its admission to trading on AIM.  The Company explores and develops industrial mineral projects, with a primary focus on borates and lithium. The Company's operations are based in Hermosillo in northern Mexico and the Company currently has two significant projects under development in the State of Sonora, one being a borate project and the other a lithium project.  The two main assets of Bacanora Minerals are The Magdalena Borate Project in Sonora State, Mexico, where the Company's main borate zone, El Cajon, has a NI 43-101 compliant Indicated Resource of 1.17 Mt of B2O3, at an 8 per cent. cut-off grade.  The second main asset is The Sonora Lithium Project, which covers ten mining concession areas in North East Sonora State.  Five of the concessions have been granted by the Federal Mining Ministry, and the remaining five areas are the subject of applications that have been made by the Company and are Approved for Title. The Company, through drilling work to date, has established a NI 43-101 compliant Indicated Resource of 2.68 Mt of LCE at a 2,000 ppm cut-off grade attributable to Bacanora Minerals.  The fundraising raised £4.75m for the Company, before expenses, at a Placing Price of 33 pence per share; at the time of admission giving a market capitalisation of £25.8m.

Bango (LON:BGO)

Bango, the mobile payments company, has announced that it has launched one-click Direct Operator Billing for Samsung Galaxy Apps, Samsung’s own app store, with Etisalat, the telecoms giant with operations in 19 countries in the Middle East, Africa and Asia. From today, Etisalat subscribers using Samsung Galaxy Apps will enjoy frictionless payment for apps and in-app purchases, paying on their phone bill without the need to register personal details. Bango announced a group-wide Etisalat partnership on 5 June 2014 and the partnership has already seen Direct Operator Billing launched for users of Google Play and BlackBerry World, reaching tens of millions of consumers.     Etisalat is a regional telecommunications giant and is one of the largest corporations in the six Arab countries of the Gulf Cooperation Council. The Middle East is seeing dramatic smartphone growth, with device numbers expected to almost double this year, from 67m in 2013 to 112.2m in 2014. 

Belgravium Technologies (LON:BVM)

Belgravium Technologies announced that trading in the first six months of the year has been satisfactory and in line with management's expectations. It was reported at the AGM that trading in the period had started slowly. Trading picked up significantly in Q2 and as a consequence the results for the six months ended 30 June 2014 will show an increase in revenue and a significant improvement in profits compared to the equivalent period last year. As in previous years trading for the year as a whole is expected to be second half weighted. The directors are encouraged by the level of enquiries and are confident that a good proportion of these can be converted to sales in the second half. 

CDialogues (LON:CDOG)

CDialogues, the provider of mobile marketing solutions to Mobile Network Operators (MNOs) provided a trading update for the three month period to 30 June 2014, which is in line with market expectations. Trading during the three month period ended 30 June 2014 continued to build strongly on the momentum achieved in the first quarter of 2014 while the recent new campaign launches are expected to lead to further revenue diversification. Revenue for the first half of the current financial year is approximately €4m with EBITDA no less than €1.4m representing year on year growth of above 100 per cent for both. Free cash flow for the same period (excluding one-off items relating to the AIM listing) reached approximately €0.5m further enhancing its cash position which was at the level of €1.75m as of 30 June 2014. Subscription-based revenues, which provide greater scalability and visibility for the business, accounted for more than 75 per cent of total revenues for the first half of the year. After the recent launches of new projects, CDialogues is now operating campaigns for a total subscriber base of 27m customers (31.03.2014: 15m) in the Middle East. CDialogues will announce its interim results for the six months ended 30 June 2014 on Monday 15 September 2014. 

Chi-Med (LON:HCM)

Chi-Med, the China-based healthcare and consumer products group, announced its unaudited financial results for the six months ended 30 June 2014. Revenue, on continuing operations was up 73 per cent to $30.3m (H1 2013: $17.6m) and net profit attributable to Chi-Med equity holders was up 97 per cent to $6.4m (H1 2013: $3.3m). The Company has a stable cash position: cash and cash equivalents at the Chi-Med Group level of $59.4m (31 December 2013: $46.9m); in addition, and not included at Chi-Med Group level, cash and cash equivalents held at the JV level of $91.6m (31 December 2013: $99.0m). In its China Healthcare Division, the commercial restructure is complete – Good Supply Practice distribution companies are now in place to enable the 2,700-person commercial team to sell third party products. In the Drug R&D Division, ten clinical trials are progressing rapidly and building value, amongst them 2 Phase III registration studies on HMPL-004 in ulcerative colitis (NATRUL-3 and NATRUL-4); 3 Phase II proof-of-concept studies (AZD6094 in papillary renal cell carcinoma and fruquintinib in third-line colorectal and non-small cell lung cancer); 3 Phase Ib expansion studies (AZD6094 non-small cell lung cancer, sulfatinib in neuroendocrine tumours, and epitinib in non-small cell lung cancer with brain metastasis); and 2 Phase I studies (HMPL-523/Syk inhibitor for inflammation and theliatinib in solid tumours). Spending of $19.8m (H1 2013: $15.2m) on clinical trials balanced by aggregate $20.1m (H1 2013: $38.1m) cash and equity injections and contractual obligations from partners received by Drug R&D Division subsidiaries and JVs.

Eagle Eye Solutions Group LON:EYE)

Eagle Eye gave a trading update ahead of its audited preliminary results for the year ended 30 June 2014 which are expected to be announced on 22 September 2014. Based on unaudited figures, turnover for the Period is expected to be in the region of £1.8m, a growth rate of 157 per cent from prior year (FY 2013:£0.7m). The percentage of revenue from transactions is expected to be approximately 60 per cent. The board expects to report an EBITDA loss of £0.8m and cash of £2.5m which is in line with management expectations. The acquisition of 2ergo Limited has been fully integrated into the main business without incident and its costs are now aligned with its revenues. 

Epwin (LON:EPWN)

Epwin, a vertically integrated manufacturer of extrusions, mouldings and fabricated low maintenance building products, supplying the RMI, new build property and social housing sectors, recently announced its admission to trading on AIM.  The Group has a strong market presence with revenues in the year to 31 December 2013 of £264m and Adjusted EBITDA of £21m.  The Group employs in excess of 2,300 people, and operates from approximately 1.2m sq.ft. of leased production and warehousing space across the UK, with major facilities in Telford, Tamworth, Macclesfield, Scunthorpe, Paignton, Newton Abbot and Northampton.  The Group is structured in three primary operating divisions, designed to provide the most appropriate and relevant product offerings for its customers. These are the Building Components Division, Building Products Division and Window Systems Division.  The Placing and the Vendor Placing together will raise a total of £94m. The expected net proceeds for the Group under the Placing will be £10m and will be used to repay a proportion of the debt within the business, in combination with new debt facilities raised of £25m.  The Placing Price was set at 100 pence per Ordinary Share, giving a market capitalisation on admission of approximately £135m.

Fitbug Holdings (LON:FITB)*

Fitbug Holdings, the AIM listed provider of online personal health and well-being services, announced that NW1 Investments Limited and Kifin Limited (Loan Holder), a Kirsh Group subsidiary have together agreed to loan £1,750,000 to the Company. The Loan is repayable by 31 July 2015 and will accrue interest at a rate of 5 per cent per annum, payable on a quarterly basis. The funds will be loaned through NW1 Investments Limited, a company in which the family of David Turner and Allan Fisher have a material interest. A trial date of 9 February 2015 has been set by the U.S. District Court of Northern California to hear the Company's legal action against Fitbit. This legal action alleges trademark infringement, unfair competition and unfair business practices. The Company believes that it has a strong case. Malcolm Fried, CEO said "The support of NW1 Investments Limited and the Kirsh Group leaves the business well placed to continue developing both its products and trading relationships and also to pursue the legal action against Fitbit to fruition." 

Miton Group (LON:MGR)

The fund management group announced a trading update for the 6 months to 30 June 2014.  Net AuM (assets under management) inflows of £29m, with Equity Funds attracting inflows of £212m offset by outflows from the defensively positioned Multi-Asset Funds. £2.6bn of AuM as at 30 June 2014 following the sale of £438m AuM in Miton Capital Partners Limited (MCPL) which completed on 31 March 2014. Like-for-like AuM comparatives with current group constituents would have been £2.3bn as at 30 June 2013 and £2.6bn as at 31 December 2013. The Board expects Adjusted Profit before Tax for the six months ended 30 June 2014 to be well ahead of the prior year, consistent with expectations. Half year cash balances increased to £16.2m (31.12.13: £11.2m) after payment of bonuses and final dividend but including £3.5m net cash received from the disposal of MCPL. New multi-asset management team led by David Jane has started well since joining Miton on 9 June 

MoPowered Group (LON:MPOW)

MoPowered announced the launch of a new product, MoPowered 3DS, which marks the commercialisation of a technology that the Group has been using as a component within its SaaS platform for over a year. MoPowered 3DS will enable secure transactions to be actioned more easily on mobile and tablet devices. Many online payments made with bank cards require the transaction to be authenticated with the purchaser's card-issuing bank. Historically, 3D-Secure processes have been difficult to complete on mobile devices because the pages have not presented well on the wide variety of smaller screen sizes. MoPowered has already signed a two year initial contract, with a major international remittance business, who is the initial third-party adopter of MoPowered 3DS. The contract provides for payment of a modest monthly retainer with the bulk of the revenue expected to come from fees levied on a per authentication basis, ranging between 25 pence and 10 pence, depending on volume. In addition, the Group has received interest in the technology from other large organisations in the payments, gaming and retail sectors. MoPowered expects that the commercialisation of this technology will support the achievement of its revenue targets in 2014 and beyond.

Penna Consulting (LON:PNA)

The international human resources consulting group noted that the encouraging trends referred to at the time of the preliminary results on 10 June have continued and strengthened and that Penna's results for the first quarter of the financial year (April to June) show substantial growth in both revenue and profits before tax and materially exceed management's expectations. Unaudited management accounts for the quarter show revenue 24 per cent higher than the same period of last year and profits before tax more than doubled to £1.23m. The Recruitment Solutions division achieved a 34 per cent growth in revenue to £4.45m and a 17.5 per cent operating margin to produce 610 per cent growth in profit before tax to £0.78m. The Career Services division grew revenue 24 per cent to £4.87m and profit by 13 per cent to £0.97m. This performance demonstrates clearly that while Career Services has counter-cyclical merits it can also grow powerfully in an economic upswing.

Serabi Gold (LON:SRB)

Serabi Gold, the Brazilian focused gold mining and development company, recently announced that commercial production at its Palito gold mine commenced with effect from 1 July 2014.  The Company also provided an update on its activities at its high-grade underground gold mining operation at Palito for the second quarter of 2014.  The company had Gold production of 3,242 ounces for the second quarter 2014 and 5,542 ounces for the year to date. Total mine ore production for second quarter of 15,808 tonnes @ 11.36 g/t Au with total milled production for second quarter of 18,645 tonnes @ 8.08 g/t Au.  At 30 June 2014 more than 32,500 tonnes of flotation tailings stockpiled with a grade in excess of 2.0 g/t Au, awaiting cyanidation treatment contained gold of more than 2,100 ounces.  Underground development mining has continued well with almost 3,300 metres of horizontal development completed year to date.  Of this total, 1,200 metres has been ore development, with production activity now in eight mining areas, three sectors in the Palito West area and five sectors in the Palito Main Zone.  During the first six months of the year, stoping has been ramping up, and in June over 3,500 tonnes of ore was produced from stoping.  July will see Palito reach full budgeted stope production of approximately 6,000 tonnes per month. For the first six months of 2014 development ore generated over 70 per cent of the mined ore tonnes whilst the second half of 2014 is expected to see a significant shift in the production balance with stoping forecast to contribute the majority of the mined ore tonnage.   

 Stadium Group (LON:SDM)

Stadium Group announced the acquisition of the entire issued share capital of United Wireless Ltd, a specialist in the design and manufacture of electronics for the machine-to-machine (M2M) wireless sector, for a maximum total consideration of £8m in cash and shares. The acquisition is expected to be significantly earnings enhancing in the first full year and will complement the Company's existing technologies, presenting significant potential growth opportunities and synergies. Stadium will pay an initial consideration of £6.0m to acquire United, to be satisfied by £5.0m in cash and the balance of £1.0m by the issue of 1,515,152 Stadium shares on completion. The cash consideration will be paid using a new five year revolving credit facility of up to £5m provided by Stadium's existing banking partner HSBC. Application has been made for admission of the Initial Consideration Shares to trading on AIM and dealings are expected to commence on 31 July 2014. United is being acquired on a cash and debt free basis. The current owners and joint managing directors will remain with United, have agreed to retain the Initial Consideration Shares for a minimum period of two years following Completion. The Company will make an additional earn-out payment of up to £1.33m in Stadium shares and £0.66m by way of loan notes if United exceeds certain defined earn-out targets. 

 Strategic Minerals (LON:SML)

Strategic Minerals gave an update for the quarter to June 2014. Sales for domestic iron ore from the Cobre magnetite tailings project in New Mexico continue to see strong demand with 86 per cent of last year's full year product sold in the previous six month period. During the quarter the Company started the process of obtaining approval for an exploration programme on its Jotanooka project in Western Australia. A corporate review resulted in a reduction in Director fees and overheads and the Company is on track to reduce overall corporate overhead to less than US$1.2m on an annualised basis going forward excluding costs associated with reviewing new opportunities and other exceptional items.  Following the recent Board restructuring the Board is evaluating a number of UK based candidates to take on the position of Non-Executive Chairman to the Company.

ULS Technology (LON:ULS)

ULS Technology, the provider of online B2B platforms for the UK conveyancing and financial intermediary markets, recently announced its admission to trading on AIM.  Founded in 2003 by Nigel Hoath and Andrew Weston, ULS provides a SaaS online comparison service for residential conveyancing and related legal services and online searches through its proprietary eConveyancer platform. The Group was one of the first providers in this market and the Directors believe that by being a first-mover, the Group has secured important and long-standing relationships with both distributors and solicitors. Currently ULS has over 7,500 mortgage brokers using its platform as well as over 150 solicitors and stands to benefit from increasing demand for online comparison services for residential conveyancing and related services. This demand is being driven by end customers wanting better value for money and distributors needing to demonstrate that they are treating their customers fairly.  The £12.1m placing has raised c. £4.6m (before expenses) for the Company at 40p per share.  

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