Starcom (LON:STAR) – BUY*: FY’15 Results – Platform for Growth
Market Cap: £3.7m; Current Price: 2.5p; Target Price: 4.1p
(Note attached)
FY’15 dominated by cost reduction; FY’16 focus on improved product prospects. Starcom recorded FY’15 revenue of US$5.1m, +2.5%YoY (FY’14 US$ 5.0m) principally based on its core HELIOS vehicle tracking systems device and associated SAS (services) income. The FY’15 focus was on cost control. As a result, operating loss contracted from US$(2.91)m to US$(1.56)m with reduced General & Administrative expenses including a US$200k reduction in management salaries. Accordingly Cashflow improved by US$2.55m.
FY’16 outlook, focus on new products. The key factor for revenue growth in 2016 and beyond remains market adoption of new product launches; a re-engineered WatchLock-Pro electronic padlock product; HELIOS Hybrid, a sophisticated vehicle tracking offering; and the TETIS range of container location and condition monitoring systems. Starcom reports that initial feedback from major potential customers is positive.
Underlying latent market demand remains strong given the need to tracking logistics in areas such as container shipping. Having completed a phase of product development and subsequent validation by channel partners, in addition to balance sheet and cashflow surgery, Starcom is now positioned to benefit from new product demand.
Equity raise: subsequent to results Starcom raised £450,000 (gross) via the issue of 30m shares at 1.50p/share, to fund working capital and, crucially, the expansion and development of sales channels in 2016 and beyond.
NORTHLAND CAPITAL PARTNERS VIEW: Underlying latent market demand remains strong given the need to tracking logistics in areas such as container shipping. Having completed a phase of product development and subsequent validation by channel partners, in addition to balance sheet and cashflow surgery, Starcom is now positioned to benefit from new product demand.
Arian Silver Corporation (LON:AGQ) – CORP: Tailings Project update
Market Cap: £1.3m; Current Price: 1.1p
Exclusive right for 120 days
Arian Silver Corporation has secured the exclusive right to Tierra Neuva Miniera SA de CV’s (TNM) Noche Buena gold and silver tailings project, located in northern Zacatecas State of Mexico, for a further 120 days at a cost of US$25,000.
This extended period will allow Arian to complete further metallurgical text work to define the process required to produces a saleable gold and silver concentrate.
NORTHLAND CAPITAL PARTNERS VIEW: The Noche Bueno gold and silver tailings project has a historic NI 43-101 mineral resource estimate of 100,000oz Au at a grade of 3g/t Au and 1.7moz Ag at a grade of 55g/t Ag and represents an attractive low cost near-term production opportunity for Arian. By completing the metallurgical work before acquiring the project Arian is de-risking it from an investment stand point.
Mariana Resources (LON:MARL) – BUY*: Placing
Market Cap: £21.7m; Current Price: 2.5p; Target Price: 5.4p (from 4.8p)
Closes £6m placing
Mariana Resources has raised £6m through the issue of 330,000,000 shares at a price of 1.82p per share.
Following the placing Sandstorm Gold Limited (SSL.TSX) has become a significant shareholder of Mariana with 7.56%.
Forecasts updated. BUY rating maintained and price target upgraded to 5.4p (from 4.8p).
NORTHLAND CAPITAL PARTNERS VIEW: Following the completion of Mariana Resources £6m placing we have updated our forecasts and price target. The recent share price appreciation experienced by Mariana’s ultra-high grade peer group relative to the Company has left it looking undervalued. Our price target is based on the average market capitalisation per gold equivalent resources ounce of the ultra-high grade peer group and our estimate of the Mariana’s attributable gold equivalent resource base at Hot Maden using current metal prices; over the number of shares we estimate will be in issue in 2017. As a result, we have increased our price target to 5.4p per share from 4.8p.
ImmuPharma (LON:IMM): Results
Market Cap: £34m; Current Price: 30p
Phase III trial in Lupus progressing to plan
ImmuPharma announced preliminary results for the year ended 31 December 2015.
The Company's lead programme, a pivotal Phase III clinical trial for Lupuzor™ (a potential treatment for Lupus), is progressing in 10 centres in the US and 35 centres across Europe, with recruitment underway to enrol 200 patients
The Phase III trial is fully funded following an £8.4 million placing in February and March 2016 (post-period end)
The first US sites commenced dosing Lupus patients in February 2016 (post-period end)
Elsewhere, ImmuPharma, in conjunction with the Centre National de la Recherché Scientifique (CNRS), continues to focus on expanding its Forigerimod (Lupuzor's chemical name, or P140) auto immune pipeline. A new patent has been filed outside of Lupus, which has the potential for Orphan Drug designation.
The Company's Cancer Nucant program, IPP-204106, demonstrated within its Phase I/IIa dose-finding adaptive study that the maximum tolerated dose was 9 mg/kg, which was the primary objective of the study. A number of options are under review to further progress this program.
ImmuPharma and CNRS have filed a new co-owned patent controlling the Company's peptide platform technology, with Type II diabetes being the first therapeutic area to be targeted.
NORTHLAND CAPITAL PARTNERS VIEW: ImmuPharma continues to progress its lead clinical programme, with recruitment in the Lupuzor Phase III trial going to plan. The group’s key objective this year is to complete the recruitment of 200 Lupus patients. Top line results from the trial are expected to be announced by the end of 2017.