AVN Financing, BLU Timeline and Results, ECK Contract Wins, FITB Placing, Subscription and Convertible Loan Note, HRN Admission to AIM, MARL Estimate, MMH Interim Results, MXO Mexico Update, NET Contract Win, PLI Q2 Results and Highlights, SVR Contract Win, TRCS Trading Update, UNG Launch, VENN Trading Update
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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.
Avanti Communications (LON:AVN)
Avanti Communications Group, a provider of satellite data communications services in Europe, the Middle East and Africa (EMEA), announced the completion of financing for its HYLAS 4 satellite, in line with the previously announced financing plan. Avanti has successfully placed $125m in Senior Secured Notes due 2019 under the Company's existing indenture. The Notes will be issued at a small discount to the current trading price of Avanti's existing notes and will have a coupon of 10 percent. HYLAS 4 remains on-track for launch in early 2017 and will complete Avanti's coverage of EMEA. The majority of the satellite's capacity will serve high-growth markets in Africa. The Company expects that this will consolidate its first mover advantage across EMEA, and enhance the future cash generation potential of the Group. In addition, Avanti has also simultaneously conducted an equity capital raising, at a price of 200.65p per share, to raise approximately £7.2m (net) in order to satisfy demand from bond investors.
BELLUS Health (TSE:BLU)*
BELLUS Health, a drug development company focused on rare diseases, narrowed timelines for the Phase III Confirmatory Study for KIACTA in AA amyloidosis and reported its financial and operating results for the second quarter ended June 30. To date, approximately 85 percent of the required events to complete the Phase III Confirmatory Study for KIACTA have occurred. Based on the event rate, the Company anticipates the study will meet the 120 events required to complete the trial by the end of the first quarter of 2016. During the second quarter of 2015, the KIACTA Phase III Confirmatory Study continued to progress, following patient enrolment completion in January 2015. The study is designed to confirm the safety and efficacy of KIACTA in preventing renal function decline in patients diagnosed with AA amyloidosis, an orphan indication resulting in renal dysfunction that often leads to dialysis and death. KIACTA is partnered with global private equity firm Auven Therapeutics. Auven Therapeutics is conducting the KIACTA study and funding 100 percent of the development costs, including the Phase III Confirmatory Study and other related activities, which Total costs are currently estimated to be in excess of $60m. Overall proceeds from potential future revenue of KIACTA will be shared between Auven Therapeutics and BELLUS Health based on a pre-agreed formula, and assuming that Total divestiture transaction proceeds reach a pre-determined threshold, the parties will share aggregate proceeds equally. Pre-clinical studies are being conducted to evaluate Shigamab in the treatment of Hemolytic Uremic Syndrome caused by Shiga toxin-producing E. coli (sHUS). During 2014, in studies performed in collaboration with the Uniformed Services University of the United States Department of Defence, Shigamab was shown to reduce toxicity of Shiga toxin type 2 in a sHUS mouse model, even following delayed treatment, as measured by body weight loss, renal biomarkers and renal histopathology. These results support BELLUS Health's treatment approach of sHUS. Revenues amounted to $0.59m for the three-month period ended June 30, 2015, compared to $0.42m for the corresponding period the previous year. The increase is attributable to higher revenue recognised for accounting purposes in 2015 in relation to the service agreement with Auven Therapeutics for KIACTA. R&D expenses amounted to $0.17m for the three-month period ended June 30, 2015, compared to $0.37m for the corresponding period the previous year. The decrease is primarily attributable to lower expenses incurred in relation to the development of Shigamab as well as higher research tax credits recognised during the second quarter of 2015 in relation to additional claims for prior years filed during the quarter. As at June 30, 2015, the Company had available cash, cash equivalents and short-term investments Totalling $10.68m, compared to $12.31m as at December 31, 2014.
Eckoh, the global provider of secure payment products and customer service solutions, announced a number of new contract wins for its secure payments products signed since the start of the new financial year. In particular, Eckoh has won a number of new direct contracts across international markets, complementing ongoing progress in the UK. These international contracts have been signed respectively with a leading airline operator in South Africa, a large consultancy organisation in Morocco and a public sector organisation in Canada. The fourth and most recent contract was an agreement secured directly with a utility provider in the United States through Eckoh's US subsidiary, Eckoh Inc. This is the seventh contract won directly through Eckoh Inc since June 2014. The contracts are all for Eckoh's patented CallGuard solution which is deployed directly into the customer's contact centres. A key benefit of this CallGuard solution is that it can be deployed and operational extremely quickly, often in weeks, ensuring that specific compliance or fraud concerns the client may have can be addressed in a timeframe that no other solutions can match. In addition, in the UK, Eckoh has won its first new contract for the Haloh Audio Tokenisation secure payment solution, that automatically replaces sensitive card data with a non-sensitive equivalent or 'token' when a payment takes place, enabling organisations to store and use the data without the security risk. The new contract is with Sensée, an outsourcer specialising in homeworkers, who are an existing CallGuard client and the new contract is to implement the Audio Tokenisation solution on behalf of a new customer of Sensée's. The new contracts will start to generate revenue in the current financial year, supporting current growth expectations, and help to underpin the Group's growing sector dominance and international presence.
Fitbug Holdings, the provider of online personal health and wellbeing services, announced that it has raised a Total of £1.66m through a combination of the issue of new ordinary shares of 1 pence each in the Company by way of a Placing by Hybridan, Subscription by NW1 Investments Limited and the issue of a new Convertible Loan Note to NW1 Investments. A restructuring of all existing loans has been agreed on favourable terms which strengthens the Group's balance sheet, extends the term of the existing loans and reduces their interest rate. The Company has raised £0.66m at 2.5 pence per share. Additionally the Company has raised £0.35m by way of subscription from NW1 Investments, at the Placing Price. The Company has also agreed the terms of a new £0.65m convertible loan note in favour of NW1 Investments, repayable by 31 July 2017. The Loan will accrue interest at a rate of 2.5 percent per annum above the base lending rate of the Bank of England, commencing 1 January 2016 and payable on a quarterly basis in arrears. The Loan will not bear interest for the remainder of 2015. The Loan is convertible by the holder, at any time, into 20,000,000 Ordinary Shares of 1 pence each in Fitbug at a price of 3.25 pence per new Ordinary Share, a 30 percent premium to the Placing price. A restructuring of the existing NW1 Investments loans has also been agreed which is to take effect on admission of the Placing Shares and the Subscription Shares to trading on AIM, whereby: (i) £0.66m - matching £ for £ the amount of new equity raised in the Placing - of the NW1 Investments loans will become interest free and repayable on 31 July 2018; and (ii) the balance of £6.27m of the NW1 Investments loans will become repayable on 31 July 2017 with interest accruing from 1 January 2016 until 31 July 2017 at a rate of 2.5 percent above the base lending rate of the Bank of England. The funds raised will be predominantly used to support marketing and channel development focused on US and UK territories, further product enhancement and innovation with particular focus on Kiqplan Version2, and for general working capital purposes. In June the Company received its first order from Towers Watson under this partnership worth £0.27m for the provision of Fitbug Orb and support services for their first HealthVantage client, a large Asian financial services company. Over the last month Sainsbury's placed stock replenishment orders Totalling £0.26m and confirmed that the product would be included in its 2015 holiday promotions. US retailer Sam's Club has agreed a 25 store eight week trial of a Fitbug Orb, Wow and Kiqplan bundle starting in September 2015. Additionally, in-flight retail specialist Scorpio Worldwide Limited has now added a second airline, Virgin, to its list of airlines who will stock a Fitbug/Kiqplan product bundle following their initial contract with KLM. UK retailer Argos has agreed to include both the Fitbug Orb and Kiqplan in their 2015 Autumn/Winter catalogue.
Hornby (LON:HRN)
Hornby has confirmed that the admission of Hornby to trading on AIM occurred on 12 August 2015. The Ordinary Shares have been removed from trading on the Main Market of London Stock Exchange plc and their listing on the Official List has been cancelled. The Placing, which was announced on 18 June 2015, at a price of 95 pence each, raising £15.0m, is now complete. The net proceeds of the Placing of £14m will be used by the Company to repay part of the Existing Bank Debt, which comprises the Company's core debt excluding seasonal working capital needs. The balance of the net proceeds of the Placing is intended to be applied towards the continued investment in the Group's business.
Mariana Resources announced the results of the maiden Mineral Resource estimate for the high grade gold copper (Au-Cu) Hot Maden Project, eastern Turkey. The Mineral Resource estimate was prepared by independent mining consultants RungePincockMinarco Limited (RPM), and was based on assay results received for drill holes up to, and including, HTD-17 completed on 25th June. Drilling to date has been completed by our JV partner Lidya Madencilik Sanayi ve Ticaret A.S. earning up to a 70 percent interest in the Hot Maden Project. The Total maiden Mineral Resource estimate comprises of the indicated category of 4.71 million tonnes (Mt) at 10 grammes per tonne (g/t) gold and 2.2 percent copper, for a gold equivalent grade of 13.4 g/t and a Total 2.033 Million Oz Gold Equivalent(AuEq) (100 percent basis). The inferred category of 3.65 Mt at 5.5 g/t gold and 1.8 percent copper, for a gold equivalent grade of 8.2 g/t and a Total 0.968 Million Oz AuEq (100 percent basis). The Total Mineral Resource Estimate of 3 Million Oz Gold Equivalent at a gold equivalent grade of 11.2g/t (100 percent basis). Mariana's Current Attributable Interest in Hot Maden (30 percent) of 900,000 Oz Gold Equivalent at a gold equivalent grade of 11.2g/t.
Marshall Motor Holdings (LON:MMH)
Marshall Motor Holdings, an automotive retail and leasing group, announced its unaudited interim results for the six months ended 30 June 2015. Financial highlights showed revenue had increased by 16 percent to £632.5m (H1 2014: £545.4m), allowing for a profit before tax increase of 9.8 percent to £10.5m (H1 2014: £9.5m) and an earnings per share of 19.7p. The company also announced a maiden pro rata interim dividend of 0.58p per share. Operational highlights showed strong trading performance driven by contributions from recently acquired businesses and continued organic growth. New car unit sales were up by 10.4 percent (like-for-like up by 5.9 percent), used car unit sales up by 11.8 percent (like-for-like up by 2.7 percent) and Total after sales revenues were up by 9.0 percent (like-for-like up by 1.7 percent).
MX Oil, the oil and gas investment company, announced an update on the progress it is making in Mexico together with its partner Geo Estratos with regards to the on-going Bid Round 1 Licensing round and its efforts to secure onshore conventional concessions in the re-opening Mexican energy sector. The Company is now one of only 15 participating companies in Bid Round 1 to have completed the payment for the bidding inscription and is currently finalising information ahead of submission of the pre-qualification filing. A Total of 25 Land Contract Areas in the states of Chiapas, Nuevo Leon, Tabasco, Tamaulipas and Veracruz will be awarded to companies that satisfy the pre-qualification requirements and win the subsequent tender process. Following access being granted to the data room in June 2015, analysis and due diligence of the target blocks is progressing well, ahead of the anticipated award of concessions in December 2015.
Netcall (LON:NET)
Netcall, a customer engagement software provider, announced that it has secured a five-year SaaS contract worth a minimum of £1.4m to provide its Liberty multi-channel contact centre and unified communication solutions. As part of the agreement Netcall will deliver a range of inbound and outbound voice, email and chat applications that utilise Liberty's business process management capabilities for workflow automation and data integration with legacy systems. This will enable the client to deliver a consistent, personalised customer experience and achieve efficiencies. Netcall's solution will replace a number of legacy on-premise systems with a hosted solution that provides a virtual contact centre for the client's six sites.
ProMetic Life Sciences (TSE:PLI)*
ProMetic Life Sciences reported its second quarter ended June 30, 2015 highlights and financial results. During the second quarter of 2015, ProMetic completed a $57.6m bought deal financing comprised of 22.1 million common shares, including over-allotment, in the capital of the Corporation at a price of $2.60 per share. The selected C1 Esterase Inhibitor is the next plasma-derived drug candidate to be developed. ProMetic also entered into a strategic long-term manufacturing agreement with Emergent BioSolutions providing ProMetic with access to additional cGMP processing capacity of up to 250,000 litres of plasma annually in an FDA-licensed facility, located in Winnipeg, Canada. ProMetic also presented new pre-clinical data at the American Thoracic Society 2015 International Conference held in Denver, USA, on PBI-4050, its orally active anti-fibrotic drug candidate in phase II clinical trials for the treatment of IPF whereby in the gold standard animal model used to emulate pulmonary fibrosis in humans, PBI-4050 performed favourably compared to Nintedanib, one of the two FDA-approved products for such medical use. The Company finished the second quarter ended June 30, 2015 with a strong cash position of $56.7m. Total revenues for the second quarter ended June 30, 2015 were $2.9m compared to $4.4m for the second quarter ended June 30, 2014. Revenues from the sale of goods amounted to $2.7m compared to $3.1m for the same period in 2014. Service revenues were $0.2m for the quarter ended June 30, 2015 compared to $1.3m for the quarter ended June 30, 2014. The decrease is due to lower product sales and the fact that services billed to NantPro are being eliminated upon consolidation due to its acquisition from a control perspective in May 2014. ProMetic generated a net loss of $14.8m for the quarter ended June 30, 2015 compared to net earnings of $23.4m for the quarter ended June 30, 2014. The increase in the net loss is mainly due to the fact that in the second quarter 2014, the Corporation had recognised an aggregate gain of $32.3m in relation to the Nantpro business combination whereas this transaction did not impact in the second quarter 2015.
ServicePower Technologies (LON:SVR)
ServicePower Technologies, a market leader in field service management technology, announced that it has signed contracts with three major North America companies for its ServiceOperations and ServiceMobility platforms. JVCKENWOOD USA Corporation and JVCKENWOOD Canada, has selected ServiceOperations as its warranty claims processing and payment platform for the US and Canada; a branded audio, video and multimedia company has appointed ServicePower to utilise ServiceOperations in support of its multi-brand music lifestyle business; while a leading North American consumer products manufacturer, has partnered with ServicePower to implement its ServiceMobility application for field services within the manufacturing sector. JVCKENWOOD provides services to warranty customers by using the best third party contractors in North America to quickly manage the repair of products in the event of a failure. The ServiceOperations solution will enable the company to optimally manage the warranty process to ensure claims for repair services are validated against the highest levels of control for warranty reserve. The flexibility and global capability of the platform will enable JVCKENWOOD to manage US and Canadian operations based on individual country requirements. Audio, Video and Multimedia Company a global leader in audio systems, docking stations, sound bars, headphones and connected audio has signed up ServicePower to utilise ServiceOperations in support of its multi-brand music lifestyle business. Consumer Products Manufacturer a leading North American consumer products manufacturer has partnered with ServicePower to use its cutting-edge, cross-platform ServiceMobility solution for field service application within the manufacturing sector. The client created its own mobile application decades ago which was then integrated to ServicePower's ServiceScheduling routing optimisation engine in order to deliver improvements in technician productivity and customer satisfaction. ServiceMobility, hosted by ServicePower, will provide the client with the ability to further mobilise its field service processes, including the functionality needed to support on-site repairs, including schedules, integrated navigation, status acquisition and geographic location, access to parts inventory and payment processing.
Tracsis, a leading provider of software and technology led products and services for the transportation industry, provided the following trading update for the year ended 31 July 2015 ahead of the full year results being published. Due to strong trading across the Group full year results are now expected to be ahead of the previous year and market forecasts. The Board anticipates that group revenue will be circa £25m (2014: £22.4m) with adjusted pre-tax profit expected to be comfortably ahead of market expectations of £5.5m and also ahead of the previous year (2014: £5.0m). Year-end cash balances were in excess of £12m (2014: £8.9m), and the business remains debt free. In line with the Group's stated strategy, Management continues to pursue a number of investment opportunities and looks forward to updating the market in due course.
Universe Group (LON:UNG)
Universe, a leading developer and supplier of point of sale, payment and on-line loyalty systems announced that its subsidiary HTEC, has launched an innovative new card payment encryption solution, called "Perseus". The new proprietary solution adds an additional layer of security to card payment transactions at the point of sale and makes HTEC the first provider of point-to-point encryption (P2PE) technology designed to be equally adept in both the petrol forecourt and traditional retail sectors. Perseus, which has been approved and listed by the Payment Card Industry Security Standards Council complements HTEC's proven Gemini Payment Service. The Perseus P2PE solution also provides customers with improved fraud prevention and management to significantly reduce the complexities of their compliance with the Payment Card Industry Security Standards Council's security standards
Venn Life Sciences Holdings (LON:VENN)
Venn Life Sciences, a growing Clinical Research Organisation (CRO) providing clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients, announces a strong first half of 2015 with the Company billing in excess of €4m, up 170 percent against the same period in 2014 (H1: €1.5m). The Company has demonstrated continued growth throughout 2015 driven by contract wins amounting to over €9m in the period to 30 June 2015.