This week: Testing to the Max, Medicsight’s closer ‘eye’, Sarantel sends the right signals
Axis Shield (ASD 335p / £167.49m)
London listed innovative international in vitro diagnostics company last week issued an Interim Management Statement for the 19 week period ending 13 May 2011. Trading in 2011 started well, with revenues and profitability in line with market expectations. In the Point-of-Care Division both NycoCardand Afinion sales have benefited from a more typical flu season which has helped to increase CRP sales Axis-shield (LON:ASD) remains on track to launch a lipid panel on Afinion by the end of the year and believes this will significantly enhance system appeal. ASD’s franchise in diabetes HbA1c testing continues to produce increased revenues on Afinion and Nycocardat the point-of-care, and laboratory sales are expected to benefit from the launch of an Axis-Shield HbA1c test on Abbott’s ARCHITECTinstrument in the second half of the year. In the Laboratory Division, sales of anti-CCP test for early detection of rheumatoid arthritis have shown strong demand and the integration of the Catch homocysteine business is progressing ahead of schedule. New data published on the Active-B12 test have generated increased interest in this more efficient method to identify vitamin B12 deficiency. Revenues from the Direct Distribution Division are encouraging following the difficult market conditions experienced in 2010. Shareholders last week voted at the AGM on the Company’s proposed maiden dividend of 1p per share. Despite on-going currency headwinds, Axis-Shield has made an encouraging start to the current financial year. Furthermore, the Board remains confident about the trading outlook for the remainder of the year and believes that the results for the year ending 31 December 2011 will be in line with current market expectations.
Borders & Southern (LON:BOR) (BOR 56p / £240m)
Borders & Southern announced that it has assigned two of its option wells under contract for the drilling unit, Leiv Eiriksson, to Falklands Oil & Gas (FOGL). The two wells will follow on from BOR’s Darwin and Stebbing wells, which are anticipated to start drilling in December 2011.
Under the terms of the assignment, the companies will share mobilisation and demobilisation costs for the rig, along with ancillary equipment and services. Chief Executive Howard Obee commented: “We are delighted to have signed this agreement with FOGL. It will result in significant cost savings for Borders & Southern.” BOR also announced that for the financial year ended December 31st, it swung into a full year pre-tax loss, but said it has sufficient funds, with contingency, to complete its drilling programme. It reported a pre-tax loss of $165,283 against a profit for 2009 of $3.2m and also reported a cash balance of $194m.
Dominion Petroleum (LON:DPL) (DPL 5.7p / £90.62m)
Dominion Petroleum, an oil and gas explorer, has announced that it signed a Production Sharing Contract for Block L9 in the Lamu Basin, offshore Kenya, giving the company a 60 per cent working interest and operatorship. The Company will reprocess 2,500 kms of 2D seismic data, carry out block wide G&G studies (geophysics and geodynamics) and acquire 500 sq km of 3D seismic data in the initial two year exploration period. Gross expenditure for this will be a minimum of $6.15m.
EKF Diagnostics (LON:EKF) (EKF 23.5p / £39.67m)
EKF Diagnostics, the point-of–care diagnostics business, this week announced its preliminary results for the year ended 31 December 2010. During the year the company completed the acquisition of EKF-diagnostic GmbH for €14m and refocused its strategy to one of building a substantial point of care diagnostics business focused primarily on the significant commercial opportunity for diabetes testing. This was continued through two further acquisitions.
At the same as its preliminary results the company announced it had entered into an agreement to acquire Stanbio Laboratory L.P. for a total consideration of up to $25.5m. Stanbio is an established 50 year old US based medical diagnostic devices distribution and manufacturing business selling either direct or through a distribution network complementary to the existing EKF distribution network. The acquisition of Stanbio is to be funded by a placing to raise £13m at 20 p per share, a discount of 2.44 per cent. to the closing middle market price on 20 May 2011. In addition and contingent on the completion of the acquisition of Stanbio, the company has also entered into a contract for the distribution of its Hemo-Control haemoglobin instrument with a major US diagnostics business.
The chairman reported that during the remainder of 2011 the company will be concentrating on the successful integration of the Stanbio business and on continuing to drive the performance of the existing businesses. Progress to date in 2011 has been very strong with revenues up 28 per cent. in the first quarter when compared to the equivalent period of 2010.
Encore Oil (LON:EO.) (EO. 66.25p / £193.91m)
EnCore has decided to cancel the flotation of subsidiary XEO Exploration due to unattractive market conditions and diminished appetite for North Sea exploration assets after the implementation of Treasury’s substantial tax increases.
GGG Resources (GGG 27.25p / £45.17m)
AIM listed GGG Resources was admitted to the official list of ASX Limited on the 17th May 2011. Shares in the form of CHESS Depositary Interests (CDIs) are trading on ASX under the stock ticker code GGB. Having recently raised A$8.129m under its Australian prospectus offering, GGG now has better access to potential additional equity funding sources and considers this to be important for the continued fast-track advancement of its interest in the Bullabulling Gold Project in Western Australia. Bullabulling is a former open pit gold mine which the Company is developing into a producing mine. It is located near to Perth, Western Australia, with the property straddling the main Kalgoorlie highway. Bullabulling’s geology is characterised by low grade and bulk tonnage types of deposit amenable to open pit mining. An upgrade on its current JORC Code compliant Inferred Resource of 1.98m ounces of gold is expected to be reported to shareholders before the end of June.
Idox (LON:IDOX) (IDOX 20p / £68.36m)
AIM listed public sector software and services provider announced a trading update for the six months to 30 April 2011. Revenue and normalised profits have grown quite significantly over the first half of the year. Acquisitions over the past year have also made a positive impact, whilst new business sales from IDOX's core local authority business continue to be encouraging. McLaren Software, having been acquired in December 2010, has returned to growth and profitability ahead of schedule with performance expected to accelerate as the Company invests in additional global sales resource to capitalise on a growing pipeline of opportunities. IDOX’s term loan has now been paid off, which the Company now believes will allow it to move ahead and execute on further earnings enhancing acquisitions, as well as supporting the Company's declared progressive dividend policy.
Max Petroleum (LON:MXP) (MXP 13.75p / £126.92m)
Max Petroleum, an oil and gas exploration and development company focused on Kazakhstan, has said that due to ongoing performance issues with the drilling rig and contractor, combined with a poor and deteriorating condition of the uncased wellbore below 2,000 metres, it has decided to complete the ASK-1 well, Asanketken, as a Jurassic producer and drill a second well both to test the prospect’s Triassic potential and to further appraise the previously announced Jurassic discovery. The Company has terminated the drilling contract for the Sun ZJ-40 rig currently drilling ASK-1 and will release that rig immediately upon completion of drilling operations on that well. The Company has also released the Sun ZJ-30 rig after it completed drilling operations on the ZMA-ET2 appraisal well in the Zhana Makat Field. MXP estimates that the productive reservoirs seen in ASK-1, contain a range of between 4m – 7m barrels of oil in place with expected oil recovery factors ranging from 35 to 40 per cent. They expect to place the ASK-1 well on test production in 60-90 days upon receipt of the requisite government approvals. The Company plans to begin drilling the ASK-2 well in July, using the IDECO rig which is currently drilling the NARS-1 exploration well in the Narmundunak South Prospect on Block E.
MXP has entered into a one-year contract with Zhanros Drilling LLP for a ZJ-20 capable of drilling to 2,000 metres, which will be used in conjunction with the IDECO rig to drill post-salt exploration, appraisal and development wells going forward. MXP is currently mobilising the ZJ-20 rig to the Uytas Field in Block A to drill three appraisal wells beginning in June, after which the rig will test the Zhalgyz South Prospect, also located in Block A. Forward plans for the IDECO rig include finishing the NARS-1 exploration well, then drilling the BOR-3 development well in the Borkyldakty Field, the ASK-2 exploration and appraisal well in the Asanketken Field and the SAG-1 well in the Sagiz West prospect, all of which are in Block E.
Medicsight (LON:MDST) (MDST 7.25p / £11.28m)
AIM listed industry leader in the development of Computer-Aided Detection (CAD) and medical image analysis software is pleased to announce that the Medicsight ColonCAD API (Application Programming Interface) has received clearance from the U.S. Food and Drug Administration (FDA). The clearance enables Medicsight to implement its US sales and marketing strategy, a primary objective in the development of the business since flotation. Medicsight’s ColonCAD is designed to assist radiologists during their review of CT colonography (CTC – also known as “Virtual Colonoscopy”) images by automatically highlighting potential colorectal polyps (possible precursors to colorectal cancer) on the CT image. The market awaits news as the Company continues to make progress toward finalising its regulatory approval in Japan also.
Oilex (LON:OEX) (OEX 25p / £63.32m)
The oil and gas exploration and production company based in Perth Australia provided an update on drilling in which it stated that on May 22nd, the La Rocca-1 well was drilled to a depth of 3,579 meters and is drilling ahead. The well is the first exploration well in the permit which is in the Intra Mungaroo channel zone and was spudded on 30 April 2011 having been drilled by the "Ocean Patriot" drilling rig. Oilex has secured funding for the cost of drilling and testing the well under the terms of a previously announced farm-out and subsequently modified agreement with Apache Northwest Pty Ltd, the Operators of the well. The well has a planned total depth of 5,100 meters. Whilst Oilex has an 8.4 per cent interest in the well, Apache maintains a 40 per cent interest, and other partners include Sasol Petroleum Australia Ltd, Videocon Industries Ltd, Gujarat State Petroleum Corporation Ltd, Bharat Petro Resources Limited and Hindustan Petroleum Corp. Ltd
Omg (LON:OMG) (OMG 32.25p / £22.76m)
AIM listed technology group announced interim results for the 6 months to 31 March 2011. Revenues for the period were down to £13.3m (2010: £14.4m), largely as a result of a delay in the progress of one large project within the Vicon "House of Moves" segment, whilst the Company also posted a loss before tax of £0.3m (2010: profit before tax of £1.4m). On the balance sheet, the Company saw its cash balance fall to £2.3m from £4.1m at the end of H1 2010, in part reflected by a £1.3m acquisition of Sensing Systems, which was brought in to establish OMG as technology leader in the growing video intelligence market. Whilst management is disappointed by the reported losses for the first half, it continues to invest in opportunities, such as OMG Life (a new consumer subsidiary), and believes its breadth of offering across multiple markets ensures it is well placed to contend with the unstable global economic conditions.
Oxford Biomedica (LON:OXB) (OXB 5.85p / £55.28m)
Oxford BioMedica announced today that Dr Alex Lewis has been appointed as Director of Corporate Activities and Strategy and a member of the senior management team with immediate effect. As a result, he will step down from the Board of Oxford Biomedica. John Dawson, Chief Executive Officer of Oxford BioMedica, said: “Alex is an expert addition to the senior management team as we continue to build Oxford BioMedica as a successful biopharmaceutical company...Alex’s knowledge and advice will also be instrumental in evaluating other value-enhancing opportunities to grow the business.” In place of Dr Alex Lewis, Dr Paul Blake will become Chairman of Oxford BioMedica’s remuneration committee and Dr Andrew Heath, Senior Independent Director and Deputy Chairman of Oxford BioMedica, will join the Company’s remuneration committee.
Oxford Nutrascience (LON:ONG) Group (OXP 3.75p / £17.40m)
Oxford Nutrascience the speciality pharmaceutical company that uses advanced pharmaceutical technologies to reposition medicines adding value to generic and soon to be off patent Active Pharmaceutical Ingredients (API's) this week announced that, following recent shareholder approval, the company's name has changed to Oxford Pharmascience Group Plc. The new name reflects the company's strategy which has evolved significantly during the last 12 months as it has expanded its technology base and expertise away from nutraceuticals to development and licensing of advanced medicines. The company's technology portfolio includes superior chewable tablets, liquid suspensions and solid state suspensions (soft chews) as well as drug delivery technologies to achieve targeted release or taste masking effects. The company is using these technologies to develop a range of medicines initially with focus on NSAIDs, statins and calcium focusing primarily on the pharmaceutical sector.
Patagonia Gold (LON:PGD) (PGD 39.25p / £288.31m)
Patagonia Gold, an Argentinian focused exploration firm, announces that it has successfully commissioned the Lomada de Leiva trial heap leach pad and processing facility with gold now being accumulated onto activated carbon. The trial has been completed within time and budget.
The expansion of the trial heap leach pad from the current 50,000 tons x 6 metres high to 180,000 tons x 12 metres high has started, with earthworks and liner placement completed. Ore loading and irrigation of the expansion is planned to commence Q3 2011. Patagonia Gold SA has recently completed an extension and infill drilling campaign, comprising 35 diamond drill holes HQ core for 4,441 metres, aimed at enlarging the resource and advancing the inferred part of the resource into an indicated category.
Plexus (LON:POS) Holdings (POS 57.5p / £46.11m)
The oil services company has secured a second contract with BG Egypt. Plexus will be supplying BG Egypt with its POS-GRIP High Pressure High Temperature wellhead system for exploration activities offshore Egypt. This contract is worth about £550,000 and revenues are expected to start in 12 months time. Plexus, who also recently signed contracts with Centrica and Statoil, is clearly benefitting from an increased awareness and demand in the oil and gas exploration industry for safer and improved operating practices post the Gulf of Mexico incident.
Sarantel (LON:SLG) Group (SLG 0.92p / £3.71m)
Sarantel, a leading manufacturer of high-performance, miniature filtering antenna for mobile and wireless devices, last week announced a number of positive new developments. It first announced volume production orders for its GeoHelix GPS antenna used in an innovative seismic probe for natural resources exploration - a new application for Sarantel’s technology. Sarantel believes the deal will have a material impact on revenues over the next 12 months. This was followed by news that the company had received production orders for its 2nd generation rugged GeoHelix GPS antenna for use in military equipment from both Selex Coommunications and Thales UK. The Selex contract, which follows on from a development deal announced last year, is for use of the antenna in the Selex Communications Soldier System Radio Plus Radio. Thales will incorporate the antenna into a body-worn soldier navigation device. These orders are also expected to have a material impact on revenues and expand the company’s penetration of the military sector outside of its traditional market in the USA.
Serabi Mining (LON:SRB) (SRB 29.25p / £18.71m) *
AIM and TSX listed Brazilian focused gold exploration company announced the results of an airborne geophysical (VTEM) survey conducted in January 2011 identifying an additional 47 conductive Electromagnetic (EM) anomalies at its Jardim do Ouro (JDO) Project in the Tapajos region of Brazil. Mike Hodgson, Chief Executive, commented: "We believe the use of airborne geophysics is an essential part of the formula for discovering concealed gold mineralization in the Tapajos. The results of the 2008 airborne survey indicated 66 EM anomalies and follow up exploration to date on 13 of these indicated nine mine-site drill ready targets. An 8,000 metre diamond drill programme is now well underway on these targets, as well as follow-up exploration on remaining un-tested anomalies. I am therefore very pleased that this 2011 survey has resulted in generating a further 47 anomalies for follow-up work, which we plan to commence this year". Serabi's short term strategy for the JDO Project (phase 1) is to be followed for the next six months and continues to focus on 'head-frame' exploration with the objective of discovering more Palito style deposits.
Silence Therapeutics (LON:SLN) (SLN 2.02p / £11.68m)
Silence, a leading biopharmaceuticals company focused on RNA interference (a gene silencing technology), will have a poster presentation at the upcoming ASCO meeting where it will present new data from its Phase 1 study of Atu027. This drug targets protein kinase in patients with advanced solid tumours and is now in a dose escalation study where preliminary data show six of 21 patients with stable disease after three months.
Sterling Energy (LON:SEY) (SEY 58.75p / £128.89m)
Sterling Energy, the independent oil and gas exploration and production Company, said that the Sangaw North-1 well in Kurdistan has been drilled to a total depth of 4,190 metres, within the Triassic Kurra Chine formation and added that the joint venture partnership has elected to conduct a flow test across the open hole section, based on gas shows while drilling.
Wireline logs have been run across the open hole section and are currently being interpreted. The flow test, including preparatory operations, is expected to take three weeks to complete. Further flow testing may be carried out, depending on the results of the first flow test and interpretation of the drilling and petrophysical data acquired in the well.
Tarsus (LON:TRS) (TRS 145p / £109.15)
Tarsus, the international business-to-business media group, announced the purchase of a 75 per cent stake in a Turkish exhibition company, IFO, for £10m. Consideration will take the form of cash, which is being raised through a £16m raising the Company has conditionally placed at £141p per share. The balance of funds raised will be used for the purpose of paying off debt. The acquisition represents part of a strategy to diversify into emerging markets, with IFO being a leader in Turkey, and this acquisition should make up 50 per cent of overall revenues by 2013. The Company is seeing more interesting M&A activities, which it believes will continue to form part of its growth strategy.
Tower Resources (LON:TRP) (TRP 6.02p / £67.61m)
AIM-listed oil and gas exploration Company last week announced its final results for the 12 months ended 31 December 2010. In Namibia the Independent Competent Persons Report confirmed huge potential based on a 2-D seismic survey. Full 3-D interpretation is underway and due for completion by end-June 2011. Financial and operational planning activities are in progress with a view to drilling early in 2012. Clear structural closure, a sustained reservoir thickness and direct hydrocarbon indicators at the main Maastrichtian prospect level have been confirmed by 3-D seismic survey. Also an Albian age reservoir was recently identified. In Uganda the prospectivity of the EA5 area has been enhanced by the results of an aero gravity gradiometry survey. A seismic survey is ready to begin so that a well can be drilled before the end of 2011.
Vectura (LON:VEC) Group (VEC 67.5 p / £220.50m)
Vectura, which develops inhaled therapies principally for the treatment of respiratory diseases, this week, was quick off the mark to announce its preliminary results for the year ended 31 March 2011. Vectura has six products marketed by its partners and a portfolio of drugs in clinical and pre-clinical development, a number of which have been licensed to major pharmaceutical companies.
The company reported revenue growth of 7 per cent. to £42.9 m (2010: £40.1 m) with gross profits increased by 10 per cent. to £40.2 m (2010: £36.6 m). The company was cash generative over the year and ended the year with £74.4 m of cash. The chairman commented: “With a reduced risk profile, strong balance sheet and multiple key catalysts expected in the short term, Vectura continues to be innovative while moving closer to becoming a self-sustaining cash generative company.”
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