Hybridan Small Cap Wrap: 3D gets its teeth into new areas, Seeing 3D without glasses, Numbers add up for StatPro

This week: 3D gets its teeth into new areas, Seeing 3D without glasses, Numbers add up for StatPro

Small Cap Wrap will be on holiday for the 23rd and the 30th of August. Back on 6th September after the holidays, but see you next week.

A 2.5 per cent fall in the FTSE 100 over the course of last week was unfortunate given the fall in UK CPI inflation, to 4.2 per cent, for June along with the lower unemployment figures released on Wednesday. The AIM All Share dipped marginally too (some 1.5 per cent), and the markets yesterday faced the continuing worry over Europe’s debt crisis after a financial health check last week on 90 of Europe’s banks resulted in 8 failing a stress test on finances, whilst another 16 were in a so called ‘danger zone’ – the news lead to difficult market conditions again yesterday, with the FTSE 100 and the DAX down 1.55 per cent, whilst NASDAQ dropped 1.44 per cent. The week ahead sees an LSE trading update on Wednesday, retail sales figures and UK public sector borrowing figures being announced on Thursday and the US deadline for reaching an agreement on raising the US debt ceiling.  

3D Diagnostic Imaging (LON:3DD) (3DD 2.12p/£3.62m)

3D Diagnostics, which owns the protected rights to a technology platform with a number of significant potential commercial products, has announced a number of new distribution partners in Australia, South Africa and South East Asia, which will open the Company up to a potential 60,000 new dental practitioners. 3D’s integrated package, the Caries Management Support System, comprises the CarieScan Pro for detection of tooth decay and a software package to gather data, and will be distributed in these new territories. In Australia, the distribution partner for the product is Ivoclar Vivadent Australia which has 4 sales offices (Melbourne, Sydney, Perth and Brisbane) selling to a market of 10,000 registered dentists, whilst South Africa brings a market total of 3,000 dentists through Inter-Africa Dental Ltd. South East Asia, interestingly, is to be covered by AcuMed Pte Ltd across Malaysia, Singapore, Thailand, Indonesia, Korea and the Philippines, bringing a potential 45,000 dentists to the pool. 3D is clearly on a commercialisation path, increasing the opportunities for sale and visibility on a global scale, and now has a considerable number of distribution agreements with some of the largest countries in North America, Europe, Africa and the Asia Pacific. The recent launch of RemoteView Software to supplement the functionality of the CarieScan PRO could help to add appeal and boost sales in each of these countries.

Abcam (LON:ABC) (ABC 416p/£755.98m) 

Global leader in the supply of protein research and detection tools announced a pre-close trading update ahead of its results for the year ended 30 June 2011.  The Board reported another successful trading period and it anticipates that profit before tax, and before costs incurred on the recent acquisition of MitoSciences, will be slightly ahead of current market expectations. During the year Abcam has also made further steps in its strategy to drive growth through the extension of geographic coverage, broadening the number and range of products in the catalogue, particularly those of non-antibody products, and through M&A activities. As other companies have reported, there has been more cautious spending amongst academic researchers in the US, arising from uncertainty caused by central government negotiations around setting the National Institutes of Health budget. This has reduced the rate of US sales growth during the second half of the financial year, but some recovery has been seen in recent months. Tight cost control together with the impact of exchange rates has enabled Abcam to improve both gross and operating margins (before MitoSciences acquisition costs) over those reported at the interim stage. The Board believes that the Company is well placed to build on its position in the protein detection and regulation market and is excited by the potential this represents.

Amerisur (LON:AMER) Resources (AMER 21.5p/£196.68m) 

Amerisur, an oil and gas producer, has applied for a modification of the Platanillo Global Environmental License which is currently under review by the Colombian Ministry of Environment, Housing and Territorial Development. The modification contemplated the construction of an access road to the southern part of the field and eight new drilling locations within that section. It is expected that the drilling programme will commence during Q4 2011. Given the delays caused by the permitting process, the Company expects to complete three new wells during 2011. In Paraguay, the aeromagnetometry programme at the San Pedro Block was completed on time and in budget and the data processing is well advanced. The Company expects to begin interpretation during July 2011.  

Angle (LON:AGL) (AGL 27.75p / £8.45m)

Angle, which focuses on the commercialisation of technology and the development of technology –based industry, last week announced a fundraising of up to £1.25m. The proceeds of the fundraising will be used to strengthen the Company’s balance sheet, help meet corporate overheads during the next 12 months and allow the Company to progress work at Parsortix; an eighty per cent. owned portfolio company which specialises in medical diagnostics. Parsortix has developed an innovative separation platform technology for the isolation of cells in blood and Angle has been working with Parsortix seeking to demonstrate that its cell separation device has the capability to isolate cancer cells.  Whilst the results are encouraging, the experiments were early stage and are subject to further work in order to validate the initial findings. It is anticipate that this work will be completed by the end of September 2011. The Company expects to spend around eighty per cent. of the funds raised to fund the validation of these initial findings with the balance used to strengthen the Company’s balance sheet. Angle also reported that whilst management service revenues from Government contracts continue to be constrained, it is trading in line with management’s expectations.  

Angel Biotechnology Holdings (ABH 0.32p/£8.60m)*

Specialist contract manufacturer of advanced biologics last week announced its interim results for the six month period ended June 30 2011. New business signed in the six month period had a total value of £949,368 of which £747,733 was from new contracts and £201,635 from additional work to existing contracts. The net loss to June 2011 was £240,869 and Angel had net assets totalling £1,707,394 and a cash balance of £902,247. During the period the Company continued the successful manufacture of clinical doses for ReNeuron's stem cell stroke trial and a 15-year lease was secured on the GMP facility in Cramlington, Newcastle upon Tyne. Gordon Sherriff, Chief Operating Officer of Angel Biotechnology Holdings Plc, said: “The second part of this financial year will see the Company continuing to deliver out of the Pentlands site. In addition, we expect to be able to secure a greater number of new contracts as the Cramlington facility nears completion. With our strong order book and partners in place to implement our business development strategy in North America we believe that the business is well positioned going forward; both to continue the progress to date and to capitalise on the availability of new capacity at our new facility in Cramlington.”

Last week, Angel also announced that it had signed an initial 12 month consultancy agreement with US-based BioProcess Technology Consultants (BPTC) of Massachusetts. These are the partners that Gordon Sherriff refers to in his quotation at the time of the interim results. Under the agreement BPTC will provide Angel with key marketing assistance in North America for cGMP cell therapy manufacturing to reinforce the Company's marketing strategy in this market. BPTC will help introduce Angel to new customers that require the advanced cell therapy development and cGMP manufacturing services which the Company offers. Gordon Sherriff said: “We are confident that this arrangement, utilising a domestic US partner, will accelerate the growth of Angel's pipeline of cell therapy contracts. We believe that it will allow us to better leverage the growing impetus of North American cell therapy companies to move their research into the clinic while faced with regulatory hurdles that are more manageable in the UK."

Brainjuicer (LON:BJU) (BJU 297p/£36.99m) 

The innovative, international online market research agency has released a half year update on trading. BrainJuicer has delivered continued sales growth during the first half of 2011, with overall revenue about 25 per cent ahead of the same period last year. The Board expect BrainJuicer to make further progress in the remainder of the year. Profits are weighted very much towards the second half, and in particular the final quarter, and at this stage the Board believes it is on track to meet market expectations for the year. 

Chime Communications (LON:CHW) (CRG 249.25p/£200.55m)

Leading marketing services group announce it acquired 100 per cent of the share capital of Reynolds-MacKenzie Limited (RML) for an initial consideration of £2.6m. RML specialises in healthcare communications for prescription medicines and its clients include: Bristol-Myers Squibb, Roche and Pfizer. RML reported revenue of £1.5m for the year ended 31 December 2010 and operating profit of £759,000. The gross assets of RML were £1,215,000 as at 31 December 2010. Further tranches of deferred contingent consideration totalling a maximum of £6.9m, may be payable depending upon the future trading performance of RML. Chime expects the acquisition of RML to be immediately earnings enhancing.

Corin (LON:CRG) Group (CMH 53p/£22.68m)

Leading manufacturer and supplier of orthopaedic devices announced it is commencing direct distribution of its Cormet Hip Resurfacing product in the United States. Stryker Corporation currently distributes Cormet in the US through a distribution agreement with Corin. Following discussions, Corin and Stryker have agreed to terminate the distribution agreement with immediate effect and commence a transition to direct distribution. The transition will be complete within the next two months. Corin does not expect the transition to direct distribution to have a material financial impact on the Group's profits.

DDD (LON:DDD) Group (DDD 28.25p/£37.74m)

DDD Group, the Company that is engaged in the development and licensing of software and hardware intellectual property and technologies for the conversion of 2D content to 3D (and also the supply of originally made 3D content), has announced that it has signed a two-year licence agreement with a mobile manufacturer to combine its TriDef 3D conversion software with the manufacturer’s latest smartphones. The technology will allow users to benefit from glasses-free functionality, the convenience of which is all the more important in the world of mobile telephony, and demonstrates the versatility and appeal of the technology. The ‘leading’ manufacturer will pay DDD quarterly royalties based on the production of handsets, which will be available from retailers in Asia, Europe and the US. The agreement also includes a one-off development and licence fee.

DDD has already made significant developments in the gaming and television- in October last year the Company announced a collaboration with AMD that combines DDD's comprehensive TriDef stereoscopic 3D software and AMD's next generation of graphics processors, whilst in the television segment Samsung (who is currently the only fully integrated TV and chip manufacturer) has been using the software since the release of its first 3D TV (its offerings represent the vast majority of 3D TV's sold globally), which is now established as the largest operator in the market space. DDD's technology is also likely to influence a large proportion of television users over the best part of the next decade (in its concentrated introduction) and beyond- 3D televisions were introduced to the mass market during late 2009/early 2010, though DDD has offered none of the hardware itself, instead developing a unique technology that turns a 2D visual into 3D, with seamless consistency. The latest announcement demonstrates the wide spread applicability of the technology and the demand for it and we continue to look out for news on the Company with great interest.

Deltex Medical (LON:DEMG) Group (DEMG 23.12p/£31.91m)

Deltex, a leading vascular monitoring company that manufactures and markets the CardioQ – ODM system, this week announced a trading update for the six months ended 30 June 2011.   The Company reported that throughout the first half of 2011 the Company made significant progress towards its goal of establishing the use of CardioQ-ODM system as a standard of care in the management of patients undergoing major surgery. Continuing growth in the UK from increased adoption of CardioQ - ODM, following the products recommendation from the National Institute for Health and Clinical Excellence (NICE), generated in excess of £400,000 in additional revenue which was partly offset by a reduction in sales to the Middle East: overall sales for the half year increased to over £3.0m (2009: £2.9m). 

Discovery Metals (LON:DME) (DME 78.5p/£343.13m) 

The mineral exploration Company said it had multiple zones of high grade copper mineralisation defined by deep drilling at the Plutus Deposit and added that encouraging drill results at the Selene Prospect in the Boseto Zone provide potential to develop additional open pit mineral resources that could contribute to increased production and/or mine life at the Boseto Copper Project in north western Botswana. The assay results received from Plutus confirm that copper-silver mineralisation continues to depths in excess of 350 metres along 7 km of strike. At Selene, all 42 holes drilled have intersected copper-silver mineralisation at depths below surface of between 25 and 200 metres along a strike length of more than 7km.

GGG Resources (GGG 24.25p / £40.19m) 

Updating on the Bullabulling Joint Venture, JORC Resource Update, GGG and Auzex Resources report that discussions with their resource consultant Snowden are now at an advanced stage. Preliminary optimisation studies have been completed and a final sign off on the resource estimate classification is expected shortly. Once completed, the JV partners will release their JORC resource statement based on the 34,800 metres of Phase One drilling. A Phase Two infill drilling programme has since commenced and 18,000 metres of drilling has been completed so far. Results from this Phase Two drilling are now being reviewed and an announcement summarising results will be made available in due course.

Goldplat (LON:GDP) (GDP 13.25p/£22.14m) 

Goldplat, a gold producer, announced that trading in the second half of the financial year was stronger than in the first and the Company expects to report a significant increase in operating profit for the full year to June 2011. The initiatives that were put in place to improve operational efficiency and profits of the South African recovery operation are impacting positively. Gold Recovery Ghana's toll processing agreements with Golden Star and Adamus Resources are performing well and will positively impact profitability. The Company is investigating collecting gold bearing by-products from gold mining operations in Burkina Faso and Mali for export to the Ghanaian recovery operation. Underground development at the Kilimapesa Hill mine at Kilimapesa Gold has commenced with the emphasis on extending the 250 metre underground strike exposure of the auriferous quartz veins to increase existing ore resources. The aim is to increase the JORC-compliant resource base at Kilimapesa Gold in the medium term to 500,000oz of gold.

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Judges Scientific (JDG 475.2p/£20.26m) 

Judges Scientific, the group that specialises in the design, manufacture and sale of scientific instruments, this week provided an update on trading during the six months to 30 June 2011. The Company reported that it continued to trade strongly during the first half and its interim results are expected to show solid organic growth of 13 per cent. in revenues. This increases to 27 per cent. when account is taken of business purchased since the beginning of 2010 including a full six months of turnover from Sircal and a first time contribution from Deben, in which  a 51 per cent. interest was acquired on 18 March 2011. The Company anticipates that: “interim profits and earnings per share before exceptional items will be consistent at this stage with market expectations for the full year”.

Landkom (LON:LKI) International (LKI 6.62p/£28.82m)

AIM listed cultivator and distributor of crops announced interim results for the 6 months to 30 April 2011. Performance was most impressive, with revenue improving 313 per cent to $7.97m, reflecting the improved 2010 harvest, a profit of $1.11m (2010: loss of $4.32m) and a 30 per cent increase in hectares planted to 52,000 for the period. High crop prices and prospects of a good harvest have also helped Landkom, having sold 5,000 tonnes of rapeseed at $600 per tonne (some 78 per cent up on 2010 forward figures) and the Company has already signed approximately 25,000 tonnes of rapeseed through further future forward sales agreements. This is the first time in the last four years that the Company has generated a profit, having lost $110m since it was founded in 2007, and the fact that Landkom has now reached a position where it has cultivated some 70 per cent of its land suggests the Company could exhibit continued growth and improvement in the years to come.

Lidco (LON:LID) Group (LID 17.75p/£30.88m)

LiDCO, the UK based hemodynamic monitoring company, last week announced that it had signed an agreement with ICU Medical, Inc. of San Clemente, California, USA appointing the Company as a non-exclusive distributor of complementary ICU medical products in the UK. This will add to the third party products that LiDCO can offer to its UK customers. ICU Medical develops, manufactures and sells innovative medical technologies used by hospitals in acute care settings. In addition the two companies signed a non exclusive licensing agreement providing ICU Medical access to some of LiDCO’s IP rights. Under the terms of the agreement, LiDCO will receive an upfront payment and royalties on any future sales derived from the IP. 

Max Petroleum (LON:MXP) (MXP 13.25p/£122.31m)

Max Petroleum, an oil and gas exploration and development Company focused on Kazakhstan, announced that it has commenced drilling the UTS-2 appraisal well on the Uytas prospect in Block A. the total depth of the well will be approximately 800 metres, targeting potential Cretaceous, Jurassic and Triassic reservoirs. Also, the Company announced the appointment, of Steven P. Martin as Senior Vice President of Engineering. Mr. Martin has over 33 years of experience as a petroleum engineer, including 27 years at Anadarko in various positions, finally serving as Anadarko's Chief Engineer. Mr. Martin holds a Bachelor of Science degree in petroleum engineering from Marietta College, an MBA degree from the University of Denver, and is a member of the Society of Petroleum Engineers. Mr. Martin will be based in Houston.

MDM Engineering (LON:MDM) Group Ltd (MDM 101p/£37.63m) 

Last week, MDM announced two new contracts; the engineering, design, project and construction management (EDPCM) for Kalagadi Manganese (Pty) Ltd's crushing and screening plant, for their Umtu Project currently under construction at Hotazel in South Africa and the process and engineering design to Bankable Feasibility Study (BFS) level for a modular gold recovery plant for Taung's Evander 6 shaft project. MDM has been involved with the Umtu project since 2007 with the award of the BFS which was completed in 2008. This award is an extension of the current EDPCM contract awarded to MDM in November 2010. The project scope that MDM is responsible for is increased by an estimated value of some /-US$50m.  For the Taung's Evander 6 shaft project, MDM is designing a plant that will minimize the use of water and will be power efficient.

Monitise (LON:MONI) (MONI 36p/£253.10m) 

Monitise, which provides end-to-end solutions that enable banks and their customers to undertake banking transactions via mobile phones, provided a trading update following its 30 June year end. The Company expects full year revenues to be more than double the 2010 figure, coming in at circa £14m, demonstrating the tremendous growth the Company has achieved. More than 10m banking transactions are now completed every month and minimum contracted revenues at year end stand at £55m for the next five years, which is approximately four times the level seen last year. A debt free position and £23m of cash on the balance sheet demonstrates the strength of the Company’s financial position, and the new Visa deal which is worth a minimum of $50m with some potential upside should add considerably to the bottom line going forwards. Having experienced a news heavy year, the Company’s customer base has doubled to nearly 4.5m registered users, with significant events including the development and launch of the first banking app for the iPad, the launch of the Mobile Money Network (a joint venture with Best Buy Europe and Charles Dunstone, founder of the Carphone Warehouse), the introduction of its first Mobile Money services in India and the establishment of a partnership arrangement with JETCO for the Asia Pacific.  This has been a good period for the Company which has seen its share price almost double over the year. 

Plexus (LON:POS) Holdings (POS 60.5p / £48.51m)

The oil services Company has been commissioned by Wintershall to design and develop a mudline crossover subsea wellhead system that will enable Wintershall to complete and produce from a previously drilled and abandoned well.  Plexus will own the Intellectual Property rights to the new wellhead system.  The design contract is worth £500,000 and additional revenue will be generated by the manufacture and supply of two subsea wellhead systems for installation in about two years time. 

RAB Capital (LON:RAB) (RAB 9.9p/£46.49m)

Following on from our comment of RAB Capital in Small Cap Wrap dated 28^th June 2011, the Company last week provided more details of  its proposals to delist from AIM and the terms of the recommended buy-out by the directors.   The Company concluded in the light of poor results, significant redemptions and further anticipated redemptions, third party assets under management will fall to a level that will make RAB’s business model difficult to sustain as a publicly quoted company. Alongside the proposal to de-list, the independent directors of the Company have recommended the buy-out under which shareholders are being provided with an opportunity to sell their shares for cash at the time of the delisting but with the option to elect to “roll over” into shares in the buyout vehicle.   

Rockhopper (LON:RKH) Exploration (RKH 219p/£565.33m) 

The North Falkland Basin oil and gas exploration Company announced that it started drilling the 14/10-6 appraisal well on Friday 15^th July. The well is situated on License PL032, which is 100 per cent owned by RKH and is the third appraisal well to be drilled on the Sea Lion feature since RKH’s oil discovery in May 2010. The well is 4.1km west of the 14/10-2 discovery well and 2.3km south west from the 14/10-4 appraisal well. The well is designed to investigate reservoir and hydrocarbon presence outside what the Company considers the minimum case area. The reservoir is expected to be thinner than those encountered in previous wells on the Sea Lion feature. Drilling operations are expected to take 38 days and a further announcement will be made once drilling is completed.

Seeing Machines (LON:SEE) Limited (SEE 3.88p / £15.85m)

Seeing Machines, a developer of advanced vision based industrial systems, announced this week that its core technology platform, faceAPI, has been used in what is billed the world’s first 3D laptop that allows for a glasses free experience. Toshiba’s new Qosmio F750 uses the technology by tracking the viewer’s eye position using the in-built webcam. We have previously commented on the wide array of possible uses to which the technology can be applied, and face API as a platform is certainly demonstrating its core appeal.

Ken Kroeger, the newly appointed CEO of Seeing Machines, commented: "First revealed at this year's CES, this is only the beginning of a new era in Glasses-free 3D. We have worked closely with SuperD, a world leader in display technology and glasses-free 3D, to bring this new technology to fruition and in March we announced the contract between the companies. The faceAPI/SuperD solution is being looked at closely by global players in the portable and tablet device market who are interested in this glasses-free liberating capability…”

The Company's strong pipeline of opportunities across Australia, Africa and the Americas, both with existing and potential clients, together with the flexible application of this increasingly demanded technology, has a great degree of appeal and the adoption of this to the laptop market is a testament to this. The Company’s share price rose from 2.5p to 4.04p on the day of the announcement.

Synairgen (LON:SNG) (SNG 26.5p/£18.43m)

The respiratory drug discovery and development Company with a particular focus on viral defence of the lungs, announced that the patent for inhaled interferon beta to treat rhinovirus infections in asthma and COPD will be granted in Japan. The patent is part of a patent portfolio owned by the University of Southampton, which is exclusively licensed to Synairgen. Richard Marsden, CEO of Synairgen, commented: “The Japanese patent protects a significant market and complements our US and European patents.”

Statpro (LON:SOG) (SOG 107p/£65.06m)

AIM listed provider of portfolio analysis and asset pricing services for the global asset management industry provided a trading update for the six months ended 30 June 2011. Trading in H1 2011 is in line with expectations; eleven new contracts were signed (H1 2010: 9) and 27 increases to existing contracts were made (H1 2010: 27). There was an increased investment in the new cloud-based service StatPro Revolution, while remaining profitable and cash-generative. The Revolution Launch campaign progressed well with the first customers secured including the first subscription from existing StatPro Seven client. Net debt was reduced to approximately £5.2m at 30 June 2011 and the Board remains confident of a successful outcome to the year. Revenue and profits for H1 2011 are expected to be in line with expectations but lower than the comparative period, as previously indicated.

*A corporate client of Hybridan LLP

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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.