A new Angle on cell separation, Supergroup’s Good Energy, Patsystems spreads the risk

Angle (LON:AGL) (AGL 27.5p/£8.37m)

ANGLE, which focuses on the commercialisation of technology, last week announced its audited results for the year ended 30 April 2011. The company reported continued progress with its portfolio of companies of which the highlight has been Parsortix, its 80 per cent. subsidiary.

Parsortix has developed an innovative cell separation platform technology for the isolation of blood cells, including cells which occur in very low numbers. This technology was previously proven in the separation of intact foetal cells from peripheral maternal blood but the company has now decided to focus resources on investigating whether and how Parsortix’s separation device could be used to capture cancer cells in blood. Successful initial findings were announced on 28 June 2011 and a fundraising of £1.25 m was announced on 15 July to provide funding to validate the initial findings and progress development of the separation device. If successful, the company believes that it will have a major opportunity to develop a patent protected cancer diagnostic device for the capture of circulating tumour cells in cancer patients, which will address a key medical requirement.

The other portfolio companies (Acolyte Biomedica, Geomerics, NeuroTargets and Novocellus) have also made steady progress and have been structured so that they can develop but with the company’s ongoing investment commitment being minimal. The management services division continues to face challenges with pressure on UK government contracts and uncertainties in the Middle East, but reported increased profits before tax of £0.3m (2010: £0.2m) on revenues of £2.4m (2010: £2.4m). This leaves the company in the position of being able to focus resources on the development of Parsortix, whilst knowing that it has other potential streams of income.

Anglesey Mining (LON:AYM) (AYM 56p/£88.57m)

Anglesey Mining has a 33 per cent interest in Labrador Iron Mines Holdings Limited (LIM, 10.93p/ £588.64m); a TSX quoted Canadian company with 39m tonnes of compliant direct shipping hematite iron ore and 125m tonnes of historical resources near Schefferville in Canada, where production and processing of iron ore is now underway. The market value of the group’s investment in LIM at 31st March 2011 more than doubled from £75m in 2010 to £156m at 31ST March 2011. The first of the LIM’s iron ore deposits has been brought to production. The Company is awaiting development of its 100 per cent stake of the Parys Mountain copper-lead-zinc project in North Wales with a total historical resource of 7.76m tonnes at 9.3 per cent combined copper, lead and zinc.

Aortech (LON:AOR) International (AOR 187.5p/£9.06m)

AorTech, the biomaterials and medical device development company, this week announced its preliminary results for the year ended 31 March 2011. The company’s Elast-Eon technology is the product of more than 10 years of research into biologically stable materials with the aim of providing a wide range of high performance materials for use in medical devices; Elast-Eon materials are patented, high silicone content, polyurethane co-polymers and are currently used in cardiac cannulae, pacemaker leads, implantable sensors, urology catheters and stents.

During the year the company implemented its plan to relocate the company’s manufacturing facility from Melbourne, Australia to the Minneapolis/St Paul area in the United States. The two primary factors driving this strategy were the significant appreciation of the Australian dollar against the US dollar and the proximity of the business to its customers. The company reported that the process of relocation is ongoing but is on schedule and on budget. In the meantime, the move has been positively welcomed by the US customer base.

The company reported increased group turnover of £1.6m (2010: £1.4m) but also increased pre-tax losses of £2.5m following the relocation of the manufacturing operations to the US and the strengthening of the Australian dollar (the currency of the existing manufacturing cost base) against sterling (the currency of the financial results reporting) and the US dollar (the currency of sales revenues).

Central Rand Gold (LON:CRND) (CRND 0.8p / £12.88m)

The South African miner reported that it has ordered two submersible pumps, at a cost of €3.5m, to dewater and to restore the Company’s resource base in the Central Rand Basin. The pumps also form part of a larger proposed plan to stop and partially treat Acid Mine Drainage through the establishment of a submersible pump station, which would be constructed at the South West vertical shaft. The pumps have the capacity to pump 1,500 kilolitres of water per hour. Each of the pumping units has an overall length of 13.5 metres and a mass of 18 metric tons and is designed to pump water from 400 metres below surface. They are constructed from a special duplex stainless steel to ensure long-term resistance to the dilute sulphuric acid water. For now, the pumps will remain in Germany while clarity is obtained with regards to the final technical solutions and project timelines. If the pumps don’t get used for the submersible pump station, the Company intends to sell them.

Dominion Petroleum (LON:DPL) (DPL 4.12p/£65.50m)

Dominion Petroleum has announced the award of Block L15 of the Lamu Basin, offshore Kenya, with Dominion serving as operator with a 100 per cent working interest. This award follows on from the award of Block L9 in March 2011. The award is subject only to the signature of a Production Sharing Contract (PSC) by Dominion and Kenya’s Ministry of Energy, scheduled to take place in the coming weeks in Nairobi. Following signature, the Initial Exploration Period of the PSC will last for two years. During this time, a gross minimum work commitment of $2.85m inclusive of the acquisition of 250sq km of 3D seismic data is required. With this addition, DPL holds a leading exploration portfolio in the deepwater East African margin by now operating three blocks in Tanzania and Kenya. The Company can now adopt a partnering strategy for these assets in terms of moving toward the drilling of this expanded portfolio.

In addition, the Small Cap Wrap of 28th June 2011 reported that DPL had entered into an Execution Agreement with Mediterranean Oil and Gas to farm in to a 75 per cent operated working interest in the production sharing contract for Offshore Malta. Following the Shareholder General Meeting on 25th July 2011, which failed to approve a number of resolutions, DPL has given notice to terminate the Execution Agreement and will not be completing the transaction. Under the Execution Agreement, Dominion agreed to pay a sum of $225,000, which is non-refundable upon such termination.

Enegi Oil (LON:ENEG) (ENEG 11.75p / £11.46m)

Enegi Oil announced that a programme for the next stage of the workover of its PAP No.1 ST No.3 well, offshore Newfoundland, has been submitted to the Department of Natural Resources DNR). Once approval to start the programme is obtained from the DNR, the programme should start within two weeks and take a maximum of four weeks to complete. The first phase of the workover has increased the pressure recovery rate and improved reservoir connectivity and the results have encouraged the Company to undertake a second phase in the hope of achieving further improvements. In the second phase, the proposed workover will: flow the well for a 3-day period to gather data to confirm the full effects of the first chemical soak; squeeze paraffin solvents and dispersants, followed by dead crude, down the well; shut in the well to monitor pressure recovery over 60 hours and flow the well for a further two-day period to gather data before squeezing further chemicals, dead crude and acid down the well. Depending on results from this initial period, the Company may shut the well in for a further period, flow it back or prepare to re-acidise. (Acidising – the injection of various acids into perforations, fractures, and reservoir rock permeability to remove contaminants and the effect of wellbore damage caused by drilling and completion operations or to increase permeability beyond the original values which existed prior to disturbing the reservoir by drilling.) Once complete and again dependent upon results, the workover programme will be followed by an extended well test, during which the parameters for production from the well will be determined and preparations for production, including applications for all necessary approvals will be completed. The results of the programme will be accounted for in a revised resource estimate for the Company’s assets in the region, currently being undertaken by AJM Deloitte of Calgary.

Elektron (LON:EKT) (EKT 37.25p/£39.64m)

AIM quoted Technology Company based in Cambridge last week announced a trading update and proposed change of name. Sales and pre-tax profits for the half year to 31 July 2011 are in line with expectations, and the Group remains on track to meet market expectations for the full year. The Board proposed to shareholders at its AGM that the company name is changed to Elektron Technology Plc to reflect the priority of the Group. Elektron expects to release its interim results on 15 September 2011.

Forte Energy (FTE 4.05p/£28.17m)

The uranium and rare earth elements (REE) company has received the final REE assay results taken from historical drilling samples at the Firawa Project in Guinea. The results are in line with management’s expectations and show a positive correlation between the uranium and the REE contents. Forte now plans to announce an initial REE resource in the coming months to complement the existing uranium resource at Firawa.

Central China Goldfields (LON:GGG) (GGG 22.75p/£37.71m)

The Phase Two resource drilling programme which commenced in mid May 2011 has been expanded to 90,000m of infill and exploration drilling which is planned to be finished in the next six months. This increase was signed off at the recent JV meeting held at Bullabulling on 11th July 2011, with the development of Bullabulling, of which GGG has a 50 per cent interest in this gold project, continues with three RC rigs. A total of 58,598m in 374 drill holes since project acquired in May 2010, with 96 drills holes totalling 17,121m finished in May, June and July of 2011. The programme continues to substantiate the current resource model, with deep drilling to test below the current resource limit being assessed by the JV.

Good Energy Group (GEGP 80p/£6.3m)

PLUS-SX quoted renewable energy business last week announced a major 100 per cent renewable electricity supply contract with international clothing retailer SuperGroup Plc. Good Energy will supply Supergroup's 72 retail stores and all UK warehouses and offices; as well as providing equipment and software to facilitate better energy management across the company. Chas Howes, Group Finance Director of SuperGroup Plc said: "Good Energy offered us value in a way that fulfils our need for competitively priced energy with meeting our desire to become a more sustainable organisation. This agreement represents a paradigm shift for us as we move from being the customer of a large utility to being the partner of a renewable energy provider."

Hutchison China Meditech (LON:HCM) (HCM 441.5p/£228.45m)

Hutchison China Meditech, the China-based healthcare and consumer products group, this week announced its interim results for the six months ended 30 June 2011. The group comprises a China Healthcare Division selling OTC and prescription drugs, a Drug R&D Division with its own drug pipeline and a Consumer Products Division selling “healthy living” focused consumer products. The group reported sales up 14 per cent. to US$83.3m (H1 2010: US$73.2m) and reduced net losses after interest, tax and minority interests down 9 per cent. to $1.4m (H1 2010: -$1.6 m).

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The China Healthcare Division grew its revenues 14 per cent. to $76.0 m and net profits after interest, tax and minority interest by 27 per cent. to $11.0 m while managing significant price spikes in certain raw materials. These prices are expected to normalise over the next year to eighteen months and underlying growth in the China pharmaceutical market remains strong.

The Drug R&D Division has strengthened its portfolios with multiple new small molecule cancer drugs now in Phase I trials in China and has continued to progress HMP- 004, its lead drug, towards Phase III. Partnering for co-development of HMPL – 004 remains under discussion.

The chairman concluded by saying that the prospects for each of the group businesses are strong and as a result they remain positive on the outlook of the company for the full year and beyond.

Ideagen (IDGP 11.50p/£8.0m)

PLUS-SX quoted Ideagen last week announced the Company's preliminary results for the year ended 30th April 2011. Revenue was up by 133 per cent to £2.25m (2010: £0.97m), basic adjusted EPS was up by 60 per cent to 0.93 pence (2010: 0.58 pence), whilst cash at bank and in hand was £0.76m (2010: £0.22m). Ideagen has net assets of £3.07m (2010: £0.86m), and a recurring revenue base, of £1.7m at the yearend covering 70 per cent of the fixed cost base. In March 2011, Ideagen raised £1.7m to acquire Ideagen Software and went on to successfully integrate Ideagen and Root 3. David Hornsby, CEO of Ideagen, commented: “We have made strong progress during the year both strategically and financially. Despite considerable investment in our products and sales team and the successful integration of two acquisitions we exceeded market forecasts....We are securing ever larger contracts and have strong recurring revenues and contract renewal rates. Current trading is positive and in line with management expectations and the Directors are confident of further progress going forward.”

Landkom (LON:LKI) International (LKI 7.62p / £33.17m)

The Ukrainian producer of agricultural commodities has completed the harvest in the Group’s southern operations with dramatically improved yields.  The winter barley yield for the south was up 110 per cent to 4.03 tonnes per hectare (ha) (2010: 1.9 tonnes per ha), with the winter wheat yield up 50 per cent to 3.23 tonnes per ha (2010: 2.2 tonnes per ha).  The substantially improved yields were obtained due to more efficient harvesting equipment completing the harvest within the optimum time period. The harvest in the west, Landkom’s largest region, and the central region is now well underway.  Weather conditions in the West are currently good, following some poor weather last week, which caused a limited amount of damage to approximately 7 per cent of the rapeseed crop.

Nostra Terra (LON:NTOG) Oil & Gas (NTOG 0.59p/£11.48m)

Nostra Terra Oil & Gas announced that drilling has begun on its initial well in the Verde prospect, located in south-eastern Colorado. The Company has a 16.25 per cent working interest in the Verde prospect. The initial well will be drilled to a depth of approximately 5,300 feet. The drilling is expected to be completed by the end of August, depending on operations and possible formation tests. Drilling will be followed by completion and initial production testing.

Patsystems (LON:PTS) (PTS 21.25p/£39.68m)

Patsystems, a trading and risk management solutions provider to the derivatives industry reported half year figures and announced a 10 per cent hike in the dividend payment. Along with the results presentation they also spoke about the recently announced (21st July) agreement to acquire Mixit Inc, a US-based developer and vendor of sell-side Order Management Systems (OMS) and Execution Management Systems (EMS) for equities and option trading. The deal benefits highlighted included: it adds further product and asset classes to the Group, particularly equities; increases scale; increases Group percentage of recurring revenue; provides cross selling opportunities for the Mixit product through the PTS international sales network and the deal is expected to be earnings accretive in the first full financial year of ownership. Three of the founders and principal shareholders of Mixit are “extremely excited” about the deal and are very likely to stay with the business beyond the earn-out period. The whole process (of the acquisition) took six months which gave PTS time to get a better insight into the Mixit product offering. Mixit comes with no debt and a small positive cash position. David Webber, CEO of Patsystems said: “Mixit has rapidly established itself as a significant vendor in the North American equities OMS market. I am excited by the growth opportunities that the Group will see from repeating Mixit’s success globally and leveraging the combined strengths of our technology and connectivity offerings.” The complementary nature of the businesses certainly does make for a strong-looking Group and we look forward to seeing the fruits of the deal.

Sarantel (LON:SLG) Group (SLG 0.88p/£7.35m)

Sarantel, a leader in the design of high-performance miniature antennas for portable wireless applications, has received its largest military contract to date from the US Army through General Dynamics. The order is for 190,000 of the rugged GeoHelix GPS antenna for use in the Rifleman Radio and could generate in excess of $6m in revenues for Sarantel over the next five years.

Silence Therapeutics (LON:SLN) (SLN 1.93p/£11.13m)

AIM listed global RNA interference therapeutics Company yesterday announced a reorganisation of the Group in order to consolidate and streamline the Company’s operations. The Company confirmed that the Redwood City office in the US closed yesterday and in addition Silence is reducing headcount in its Berlin facility from 32 to 27. The headcount reductions will not affect the Company’s R&D capabilities in Berlin and will not have a material impact on the Company’s cash position. Dr Haworth, who is based in Redwood City, resigned as planned and in the interim period, Max Herrmann, CFO of Silence, is temporarily assuming Dr Haworth’s executive duties. The Board has further decided to reduce the number of Non-Executive Directors from five to three.

Sirius Minerals (LON:SXX) (SXX 8.77p/£90.56m)

The Company has announced that drilling of the first hole has commenced at the York Potash Project. The drilling programme has been designed to reduce impact at each drill site. During the first phase of each hole it is planned that a top-hole rig (which will drill to approximately 750 metres) will only operate on a 12-hour day shift basis. The coring rig will however operate 24 hours a day. The time taken by the top-hole rig is expected to be approximately the same as the time required by the coring rig for the coring of each hole. This should result in a relatively seamless handover of each hole from top-hole rig to the coring rig. The first hole is anticipated to take 60 days to completion. It will then be around 3 weeks before Sirius receives the assay results. PR Marriott Drilling Ltd has been appointed to undertake the drilling programme, following a competitive tender process. Marriott is the largest onshore drilling contractor based in the UK.

Surgical Innovations (LON:SUN) Group (SUN 9.88p/£38.98m)

Designer and manufacturer of innovative medical devices announced it has signed heads of terms to enter into a five-year exclusive distribution agreement with CareFusion (NYSE:CFN), a leading, global medical device company, for its new advanced Pretzel-Flex(R) laparoscopic retractor. Surgical Innovations will manufacture the device for CareFusion and will be marketed in the U.S. under the CareFusion brand. SI retains the right to manufacture and distribute the device, under the SI brand in all other markets. The patented Pretzel-Flex(R) has been developed by SI for the effective retraction or repositioning of large organs, such as the liver, to provide proper access and visualisation during complex minimally invasive surgery. The second-generation innovative design gives added strength to the flexible segment technology that SI originally developed for its leading EndoFlex(R) retractor that was previously licensed to CareFusion. Greater strength has become a necessary requirement for retractors and SI has met the challenge of creating a retractor that meets the opposing demands for smaller devices, such as 3mm percutaneous instruments, and for the ability to gently reposition organs that have become steadily larger in obese patients over recent years.

Tantalus Rare Earths (TAE 36.245p/£81.819m)

Tantalus Rare Earths, a German company exploring an extensive, secondary rare earth mineralisation at surface and a primary, near surface bedrock rare earth mineralisation in north-western Madagascar (the TRE Project), has results from their pitting programme on Target 4, the Caldera Target. COO and Chief Geologist Wolfgang Hampel, says that: “These results are a very important step forward in order to define a very high tonnage, low grade REE resource. They further confirm our assumption that in fact most of the 170 km² sized area underlain by alkaline intrusive could be covered by an almost continuous layer of REE bearing argillaceous laterites. Given the huge tonnage, the other target elements could also constitute valuable by-products. The thorium and uranium grades are so low, that we will face no environmental issues with these radioactive elements.” With the current pace of exploration activities, the Directors expect to publish the first NI 43-101 compliant resource estimate in early Q4 of this year, with the hope of giving a resource estimate for 50 per cent of total surface area overlain by Rare Earth Elements (REE) bearing clays by the end of the 2011.

Toumaz (LON:TMZ) Technology (TMZ 7.12p/£44.85m)

Toumaz, a company pioneering low cost, ultra low power wireless communications and broadcast technology, last week published a half year trading update for the six months to the end of June 2011. The company achieved significant milestones during the first half and has traded in line with expectations. As reported in the SCW dated 12TH July 2011 the Sensium disposable digital plaster received 510(k) from the FDA in early July and at the same time the company established a new joint venture with California Capital Equity LLC to continue development, commercialisation and distribution of the Sensium plaster. As at 31 June 2011 the company had cash balances of £3.3 m (£2.9 m as at 31 December 2011).

*A corporate client of Hybridan LLP