Hybridan Small Cap Wrap: Eagle set to take off, keep watch on Omega, an insight into Medicsight and positive signals for Sarantel

This week: Eagle set to take off, keep watch on Omega, an insight into Medicsight and positive signals for Sarantel

African Eagle Resources (LON:AFE) (AFE 6.62p/£25.49m)

In last week’s Small Cap Wrap we wrote about AFE selling its non-core uranium division to focus on its Dutwa nickel deposit in Tanzania. On Thursday of last week AFE announced that internal deposit modeling at its Zanzui project has demonstrated the potential for a significant nickel oxide deposit, based on the initial drilling completed to date. The deposit modeling shows a JORC Exploration Target of at least 20 million tonnes at 0.9 to 1 per cent equivalent nickel. In addition, the interpretation of VTEM geophysical data (from the project) has identified a number of conductive targets which further enhance the prospectivity of the deposit. VTEM and geochemical data indicate good potential to increase the tonnage. Eight targets have been identified from VTEM interpretation with possible nickel sulphide and platinum targets as well as oxide nickel targets. It’s early days but the decision to focus just on Dutwa appears to be a sensible one.

Amerisur Resources Plc (LON:AMER) (AMER 14p/£127.93m)

Amerisur, an oil and gas producer and explorer focused on South America, said last Wednesday (24^th) that at its operations in the Platanillo contract in Colombia, daily oil production has averaged 573 barrels of oil per days over the last 15 days. Despite adverse weather, production operations have continued without interruptions over the last few months. However the 3D3C seismic programme has experienced a slight delay as the area has been affected by flooding which has made access more difficult in both the central and southern areas. It is anticipated that data recording in the southern section will be completed during December, with well locations identified in time for drilling during Q1 2011, provided ground conditions allow the requisite civil works to go ahead. 

Angel Mining (LON:ANGM) (ANGM 5.75p / £25.20m)

AIM listed Greenland-focused mining and exploration Company today reported the unaudited interim figures for the six months ended 31 August 2010. The Company recorded a loss of $2.62m for the period compared to a profit of $828k for the same period last year. At 31 August 2010, the Company's cash and bank balances amounted to $571k compared to $367k at 31 August 2009. We last write on Angel at the end of October, and the market cap is some £7m bigger since then.

On Nalunaq, the Company has almost completed its programme for bringing the mine back into production. The underground processing plant has been designed and installed. Angel Mining is completing the final commissioning of the plant and plans to start processing ore within the next 14 days. On Black Angel, the Company has completed the erection of the lower terminal for the cable car and has also completed much of the preparation work for building the upper terminal. Subject to the availability of funding, Angel should then be able to commence construction of the mill inside the mine with the expectation of producing metal concentrate in 2012.

Looking forward, Angel Mining's first priority is to become cash generative and profitable at Nalunaq. The second priority is to raise the project finance to enable the Company to complete the development of the Black Angel which is planned to be in production in 2012. We like the focus on production and are pleased to see the funding and various facilities getting sorted out.

Arian Silver Corp (LON:AGQ) (AGQ 31.25p/£85.39m)

AIM listed silver exploration, development and production company with a focus on projects in the silver belt of Mexico, released its Management's Discussion and Analysis and Financial Statements for the nine months ended 30 September 2010 last week. The Company incurred an operating loss of approximately $1.2m (2009: $1.5m). The Company does not yet generate any income from its operations. As at 30 September 2010, the Company had working capital of approximately $4.0m and part of which was generated through the completion of a placing that raised £3.9m and further exercise of share purchase warrants, share options and disposals of GeologixShares of £0.9m. Arian Silver’s greatest potential lies in the scope, through further drilling and exploration, to add significantly to its assets in the ground. The mining plan based on the present resource and which will extract only the highest grade ores will generate income for four years, but this should be sufficient to finance most of the drilling required to expand the resource by a substantial amount, perhaps 10-fold, providing significant long-term upside potential for the shares.

Bango (LON:BGO) (BGO 130p/£46.83m)

AIM listed mobile technology developer last week announced interim results for the six months to 30 September 2010. Revenue for the Company has fallen by 13.9 per cent to £10.61m (2009: £12.32m), which reflects a decrease in lower margin business, while the loss before tax widened at £0.46m (2009: £0.24m). The Company’s balance sheet looks particularly healthy, with cash at period end standing at £1.16m (2009: £0.14m) and no borrowing. Further, investment in future product R&D during the six months was £0.48m (2009: £0.37m) - much of which was due to an increasing market opportunity.

Bango’s principal activity, since being founded in 1999, has been the development and sale of mobile phone technology to assist users in making payments for the purchase of applications. In focusing on this, the Company is able to generate revenue from two core streams - analystics, where the Company provides analysis to various content providers, and payments. Whilst both are in high growth areas, it is the later that is potentially most opportunistic. Increasing sales of smart phones is driving the need for mobile content and applications at an unprecedented rate - the apps market alone is estimated to be worth $12.1bn globally in 2010 increasing to $32bn in 2015, whilst content, which was worth $1.1bn in 2009, should triple by 2014. On the back of this, a good number of mobile phone manufacturers are setting up App stores, much in the way that Apple has, to help drive revenue, and Bango is poised to benefit by taking its seat as a payments provider. An agreement with Research In Motion (RIM) to provide carrier billing for the Blackberry App World (which has a huge following, particularly in the office environment and where business applications are likely to be very popular) is perhaps the outstanding contract in place, though there are others in the pipeline, and each should provide revenues through both a monthly operating fee as well as a share of end user revenues.

We like the story and certainly appreciate the potential this company has to take advantage of what looks to be a promising opportunity.

Beacon Hill Resources (LON:BHR) (BHR 14.25p / £40.82m)

AIM listed resource company today announced that it has conditionally raised £23m at a price of 12.5 pence per share, representing 39.1 per cent of the share capital. The net proceeds of the Placing will be used to satisfy the balance of the consideration for the acquisition of the Minas Moatize coal mine by BHR Mining. The remaining proceeds from the Placing will be used to develop the Minas Moatize coal mine, which currently produces approximately 8,000 tonnes per month, establishing a large open pit coal mine with expected production in excess of 2Mtpa of saleable coal, with production commencing from Q1 2012. The strategy remains to operate the coal handling preparation plant on a BOOT (build, operate, own and transfer) basis and discussions continue to progress well in relation to this. When we last wrote on BHR in early June, the market cap was some £26m lighter and we said that the challenge would be to get the capital raised. Well done to the BHR team and its advisers! 

Berkeley Mineral Resources (LON:BMR) (BMR 6.40p/£51.88m)

AIM listed mining and processing company last week announced  its results for the year ended 30 June 2010. The loss for the year was £0.5m (2009:£0.4m), the majority of which comprises management and administrative expenses and costs associated with the acquisition of the tailings dumps at Kabwe. The company is expecting to complete the acquisition at Kabwe as soon as practicable after raising £2m to finance the acquisition and to provide working capital during the year. When the tailings dumps are fully acquired in accordance with the Zambian Government's Copperbelt Environment Project, the company will be relocating the residues arising from its operations to an environmentally safe site. Since the year end, a further £11m share capital has been issued to substantially fund the construction and commissioning of a zinc and lead processing plant and provide working capital to commence operations. The Company has made significant progress in the last financial year and we are expecting the conclusion of the Kabwe acquisition and the production of the site in the near future.

BGlobal Plc (LON:BGBL) (BGBL  36.75p / £36.57m) 

The provider of smart meter solutions and energy information management services to the UK Energy Market announced an agreement with Ladbrokes Betting and Gaming Ltd to install smart meters in 950 of their retail locations, and further, will provide ongoing meter reading, data collection and analysis services. Having installed 130,000 meters to date, which includes installations at a wide variety of retail locations, Bglobal has developed a strong expertise in the sector and is continuing to build its reputation. Shares for the Company were up 6.85 per cent to 39p on the news.

Borders & Southern Petroleum (LON:BOR) (BOR 65.50p/£280.72m)

Borders & Southern is engaged in exploration for oil and gas focused on frontier and emerging basins. Its project in the Falkland Islands comprises 5 Production Licences (100 per cent interest) in the South Falkland Basin, covering an area of nearly 20,000 square km. The Company has acquired 2,862 sq km of 2D seismic and 1,492 sq km of 3D seismic. BOR has announced the signing of a contract with Ocean Rig UDW Inc. for the provision of mobile drilling rig services using the Eirik Raude drilling unit, a dynamically positioned, harsh environment semi-submersible. The rig is currently under contract in West Africa until October 2011 following which it will be moved to the Falkland Islands to start its two well drilling programme. The wells, on the company’s Darwin and Stebbing prospects, are estimated to take 45 days each. The contract allows for up to 3 option wells. The group expects to order subsea wellhead systems and casing strings shortly. Detailed well planning will also start shortly.

Cml Microsystems (LON:CML) (CML 167p/£24.96m)

CML, which manufactures semiconductors for storage and communications devices, announced results for the six months to 30 September 2010. Performance for the period was most impressive with revenue up by 56 per cent to £11.21m (2009: £7.18m) and pre-tax profit up to £1.27m (2009: loss of £1.13m). Cash at the period end on the balance sheet stood at £0.5m, whilst net assets increased by 7.5 per cent to £13.04m. Of particular note is that revenues were up in all territories and across all market segments, demonstrating perhaps the increasing dependability that manufacturers from a variety of sectors are placing on CML’s products and a testament to their design - the wireless business (which brings in the lion’s share of the Company’s turnover, at 45 per cent) saw revenues up by 58 per cent, telecoms saw a 24 per cent rise, whilst storage has seen a tremendous 70 per cent growth. An impressive update that we received with great delight. 

Cove Energy (LON:COV) (COV 97p/£476.08m)

Oil and gas explorer Cove Energy said on Monday that gas was discovered at the Lagosta exploration well off the coast of Mozambique, marking the third discovery in a drilling campaign on the east African frontier. COV said Anadarko Petroleum Corp (APC) found gas at the well in the Rovuma offshore area 1 in the Rovuma Basin in the Indian Ocean while drilling to depths of 13,850 feet. Cove Energy owns an 8.5 per cent stake in the Rovuma offshore area 1 licence. The discovery is the third in a campaign by APC and its partners and the US Company said the three finds, Lagosta, Windjammer and Barquentine, are of sufficient size to support development of its liquefied natural gas project. Further appraisal drilling is planned. John Craven, Cove Energy CEO says “the partnership can now confidently proceed towards commercialising these discoveries”.

Goldplat (GDP 12.75p/£14.30m)

The AIM quoted gold producer announced that it has entered into a Memorandum of Agreement with Gulf Coast Resources Inc to acquire Gulf Coast Resources Limited and a 90 per cent interest in the 29 square km Banka Gold Mining lease located in the prospective Ashanti gold region in Ghana.

Goldplat has paid Gulf US$50,000 and in order for the acquisition to complete, Goldplat will undertake a due diligence review of the Banka Mining Lease and GCR. Besides this, the completion of the acquisition is also conditional on the renewal of the Banka Mining Lease and EPA Permit and the approval  of the sale of GCR from the Minister of Lands and Natural Resources. Subject to due diligence, the acquisition consideration is $1.5m with Gulf to receive a 1.5  per cent Net Smelter Return on all gold production from the Banka Mining Lease. 

This proposed acquisition represents Goldplat’s continued commitment to building on its position as a gold producer in Africa and creating a highly profitable gold company.

Herencia Resources (LON:HER) (HER 2.02p/£19.71m)

Owner of the Paguanta zinc-lead-silver-gold project in Northern Chile has appointed Zonge to complete the geophysical survey work of the high-grade copper/silver “Doris” prospect.  Zonge, who has previously completed geophysical surveys on Herencia’s “Patricia” discovery, will carry out the work during January 2011.  Following Zonge’s report, Herencia expects to plan a drilling programme to commence in the first quarter of 2011. 

Immunodiagnostic Systems Hldgs (LON:IDH) (IDH 975p/£272.71m)

The immuno-assay developer announced interim results for the six months to 30 September 2010. Revenues for the Company were up by 34 per cent to £22.6m (2009: £16.9m), whilst pre tax profits were up by 44 per cent to £6.6m. A dividend of 2p per share was paid that was 21 per cent higher than in the prior period. The Balance Sheet also looked to be in good form, with net assets coming in at £64.5m, whilst net debt has been reduced by 76.3 per cent to £2.3m. This impressive period has been clearly assisted by the progress made with the IDS-iSYS fully automated assayer which, having received FDA approval in June, has brought in revenues of £3.3m - a 450 per cent increase on the prior period.

IDS’s main area of expertise is in the provision of specialist IVD tests across a number of areas, including bone and cartilage, and currently 60 per cent of the Company’s revenues come from Manual Vitamin D products. Though manual immunoassay products will continue to offer the Company significant streams of revenue, particularly across India, China and S.America, IDS-iSYS offers the greatest potential given the many research facilities and small hospitals that have a need for the scale of product on offer. Out-licensing of IDS-iSYS should also generate substantial revenues for IDS, and a recent agreement with Omega Diagnostics (which we have also written on) underlines our belief in the licensing opportunity.

We last wrote on the Company in September when we noted the acquisition of MGP Diagnostics, which we viewed positively since it brought to the table a unique biomarker - the Matrix GLA protein which is the first marker in Vascular Calcification, therefore offering further opportunities. This, together with the positive results announcement is held in high regard by us. A positive diagnosis we think.

£LPX (LPX 11p / £19.50m)

AIM listed bio-pharmaceutical company specialising in the development of high-value differentiated biologicals announced this week that its collaboration partner, Pharmsynthez, a leading Russian research-based pharmaceutical company, has successfully listed on the Moscow Central Stock Exchange (MICEX) following an IPO which raised over £10.7m, giving Pharmsynthez a market capitalisation of £34.8m on admission. The capital raised will assist in funding clinical development of Lipoxen licensed candidates. Lipoxen have six projects, three PolyXen and three ImuXen candidates, currently in pre-clinical co-development with Pharmsynthez. The programme is aimed at delivering human proof of concept data in early course and Lipoxen remains hopeful that a number of the potential candidates will deliver results that justify them being advanced into the clinic. Lipoxen is hopeful that the Multiple Sclerosis vaccine candidate will be the first of the projects to reach the clinical trial stage early in 2011.

Recently Lipoxen announced that Baxter has selected a lead candidate, PSA-FVIII, a longer-acting form of Factor VIII molecule using Lipoxen’s PolyXen drug delivery technology and that pre-clinical development has started.  Lipoxen will receive a $2m license fee payment upfront and the issuance of a warrant to Baxter entitling them to subscribe for up to $2m in new equity in Lipoxen at an exercise price of 9.02 pence until 30 June 2015. Lipoxen’s technology platform generates a large number of opportunities with each having a decent shot at returning considerable revenue streams to the company, a point that is not reflected in the current pricing of the company. 

Mediazest (LON:MDZ) (MDZ 0.72p / £1.22m)* 

Creative digital out-of-home advertising company and audio-visual integrator last week announced that its wholly owned subsidiary, TouchVision Limited, has been successful in tendering for a number of specific Lots under the following Inter-Regional AV Equipment Framework Agreement. The Framework Agreement will run for a term of three years, 2 November 2010 to 1 November 2013, with provision for an extension of a further year. The Framework Agreement covers four purchasing consortia: Higher Education Purchasing Consortium, Wales - comprising 12 members; Value Wales - comprises 122 member institutions and includes public sector bodies such as Companies House, the DVLA and the Food Standards Agency, as well as a number of Educational institutions; London Universities Purchasing Consortium - comprising 68 full member institutions; and Southern Universities Purchasing Consortium - comprising 112 member institutions. The expected total annual spend by the consortia in respect of the Lots to which TouchVision has been appointed is £7.5m. The company has historically worked with several of the member institutions over the last 35 years under separate agreements and looks forward to continuing this work through the Inter-regional AV Equipment Framework Agreement. The completion of the cost cutting phase of the strategy for MediaZest is being followed by a stronger selling drive and a more realistic and commercially focused product range, all aimed at producing profits from the business. 

Medicsight Plc (LON:MDST) (MDST 4.88p/£7.59m)

AIM listed industry leader in the development of CAD and image analysis software to assist in the early detection and diagnosis of disease last week announced its third quarter trading results for the nine months ended 30 September 2010.  Revenue has risen by 169 per cent to £253,000 (2009: £94,000) while operating loss before interest and tax reduced by 46 per cent to £3.6m (2009: £6.6 m). The company remains in a strong cash position with a cash balance of £6.4m. The increase in revenue was mainly due to the success of its ColonCAD and MedicCO₂LON insufflator products and the company has also managed to reduce its operating loss to £3.8m compared with its 2009 figure of £6.7m. The company is expecting to achieve more revenue in the following trading period with the signed global distribution agreement for the new MedicCO₂LON insufflator product and the granted SFDA approval in China for ColonCAD 4.0 in October 2010.

Investors are waiting for comments from the US and Japanese regulatory authorities. Following the initial submission in November 2008 of a 510(k) premarket notification to the US FDA for ColonCAD 3.1, Medicsight received a second Additional Information request from the FDA in January 2010. After working closely with clinical, statistical and legal advisors, the Company sent a comprehensive response to the FDA on 2 June 2010.  The Company is currently awaiting formal feedback from the FDA on the status of its application. In November 2007 the Company submitted an application for its CTC workstation, MedicRead, to the Ministry of Health, Labour and Welfare (MHLW) of Japan. The MHLW expert panel has reviewed their application. The MHLW team completed its Quality Audit in March 2010 and is now in the process of completing the Reliability Audit phase of the submission. Again, Medicsight is waiting for MHLW feedback. The near term revenues that the MedicCO2LON Insufflator is providing, as evidenced in these results, seems to be a strategy that has paid off.  Fingers crossed for Medicsight; particularly for positive news from the FDA and MHLW.

Milestone Group (LON:MSG) (MSG 1.2p / £1.74m)*

AIM listed digital solutions and technology agency last week announced that it has raised £276k at a price of 1.13 pence per share. The proceeds of the placing will be used to provide working capital and to reduce the Company's liabilities.  The placing certainly puts Milestone on firmer financial footing from which to exploit the many opportunities that it has available as part of its full digital service offering.

National Milk Records (NMRP 32.5p/£2.39m)

PLUS quoted leading supplier of dairy and livestock services announced that the resolutions to approve the reorganisation of the Company’s share capital were duly passed at the Company’s General Meeting last week. The reorganisation was intended to reduce the number of shareholders on the Company’s register. A total of 721 Shareholders subscribed for a total of 230,720 Ordinary Shares at 28 pence per share pursuant to the Subscription. Following the General meeting, NMR announced that the Reorganisation has become effective and that dealing started on 25 November 2010 in the New Ordinary Shares of the Company.

In addition, the Directors also commented on North Atlantic Value LLP’s proposal of adjourning the GM. The Directors resolved that the GM should proceed as planned on the basis that subscription for the full amount of the Fractional Entitlements had already been secured and that it was not in the best interests of the Company and its Shareholders as a whole to alter the current process at such a late stage. In response to NAVLLP’s accusation that the Directors of NMR were in breach of their fiduciary duties by not adjourning the GM, the Directors believe that they have at all times acted in the best interests of Shareholders as a whole.

Nighthawk Energy Plc (LON:HAWK) (HAWK 10.5p/£37.60m)

The US-focused oil and gas development and production company released a strategic review of the Company’s projects, announcing that it intends to exit all projects except its flagship Jolly Ranch project in Texas in a move that will cost $65m in write downs. This represents a bold move for the Company, which only last month announced a £25m Equity Finance Facility with Darwin Strategic Limited, but one that at the very least demonstrates the Company’s recognition of projects that are draining resources and the willingness of management to step away. The Company will allow the Cliffs licences to expire whilst it is also seeking to assign its interest in project Reverve to Running Foxes Petroleum Inc in exchange for a royalty and a share of any future sale of the project. Strength in leadership is admirable, but the write down is likely to have a demonstrable impact in the markets. 

Omega Diagnostics Group Plc (LON:ODX) (ODX 17p/£3.51m)

AIM listed developer of medical diagnostics devices announced results for the six months to 30 September 2010. Performance was pleasing, with revenues of £3.3m for the period (2009: £2.87m), whilst adjusted profit after tax was up by 53 per cent to £0.4m. Cash at period end stood at £0.91m (2009: £0.86m).  The Company’s main areas of focus are the production of testing kits for Food Intolerance, as well as Allergy Testing. Sales of Genarrayt (Food Intolerance) have increased by 72 per cent to £761k, with 80 systems now installed in over 20 countries. Food Detective is also up by 6 per cent to £369k.

Omega appears to be at the cusp of a very sizeable step in the right direction- it is seeking to raise up to £7.75m at 12p to fund the proposed acquisition of the in-vitro allergy diagnostic business of Allegropharma (€6m), which Omega will use to enter the Allergy Testing market. The excess of the amount raised over and above the £7.75m will be used to fully automate the testing process. The attractive quality of the current business is that it generates 96 per cent of its sales in Germany, which alone is worth €4m per annum at gross margins of 75 per cent, and this is based purely on a semi automated testing process. Omega intends to build on this by developing a fully automated product and entering a market that is currently dominated by Phadia (which generated revenues of £332m in 2009 and EBITDA of £134m). Whilst Phadia has an established lead, Omega has the added benefits of being a welcome alternative to its competitors, whilst it also has an allergen ‘library’ of 600, which is greater than the 500 or so held by Phadia. Further, the Company is licensing the FDA approved IDS-iSYS system to handle the micro assay that Omega is currently working on, which should in theory bring the time to market down considerably. With a sound set of financial results and an acquisition strategy that appears well thought out, we urge you to keep watch on Omega.

One Media Publishing Group (OMPP 2.5p / £2.28m) 

PLUS quoted consolidators and acquirers of music and video rights last week announced that it has signed a new music catalogue deal. One Media has acquired the rights to a further 3,000 tracks of Film, TV and Karaoke Music themes of which some will be recorded over the coming year. The nature of this deal is to provide the Group with a new library of music covering popular themes which perform well within the ‘digital’ and ‘music synchronisation’ markets. ‘Music Synchronisation’ is the business of supplying music to producers so that it can be reproduced and broadcast with television programs, film, video, games, commercial, radio, and  even  0800 number phone message systems as background music.  To date, One Media has supplied some of its titles to this business arena but now sees this as a growing opportunity for greater monetisation. The catalogue deal was concluded for an outright purchase of US$32,000.

This morning, One Media, announced another deal; the rights for seventeen years on a buy-out basis from Legend World Music Ltd to their catalogue of nostalgia music. The original deal, based on a revenue sharing basis signed in January 2010, has now been altered for a fee of US$44,000 for a buy-out of LGM’s share of future revenue. The digital exploitation deal includes the rights to some very early Marvin Gaye, Doobie Brothers, Saxon, Donnie & Marie Osmond, Billy Preston and some early sessions of the Bee Gees, in total 3,500 tracks.

Given the positive updates released over the last few months for One Media, we feel there are further gains to be had by a Company that has developed the knack of signing new digital content.

Range Resources (LON:RRL) (RRL 6.4p/£78.53m)

AIM listed oil & gas exploration company announced last week that it has engaged international geochemical company, Actual Geology International Limited to carry out a "helium" survey on the 3 top drilling locations in Georgia. The co-ordinates of the locations have been given to AGI to commence mobilisation of its team in the coming days and start field operations by early December. The technology applied by AGI uses helium gas emanating from deep layers of the earth towards the earth's surface and it has been proved successful in identifying "sweet spots" for oil & gas drilling. The company believes that the future of the programme is promising given the successful results from surveys and the fact that the locations identified have undiscovered oil-in-place in excess of 450 million barrels (mmbbls). We look forward to the initial results by mid January 2011.

Regal Petroleum (LON:RPT) (RPT 17p/£54.12m)

The board of Regal Petroleum has noted the recent press speculation and said on Thursday (25^th) that it has received a number of approaches in relation to a potential offer for the Company and said the discussions are at a preliminary stage and hence there can be no certainty that any offer for the Company will be forthcoming.

Sarantel Group (LON:SLG) (SLG 1.38p/£4m)

The specialist antenna manufacturer announced a contract to supply GPS antennae to SELEX communications for use in their Soldier System Radio Plus radio. SELEX’s radios are used by both the military and in industry, and Sarantel’s rugged GeoHelix GPS antenna appears to very much fit the profile of user that SELEX is targeting. The radio is a high specification product that has been designed and tested to meet the most rigorous conditions- coupled with Sarantel’s class leading antenna; we see the radio standing the tests of time, effectiveness and durability. We register positive signals with our antennae on this one.

Ultimate Finance (UFG 12.75p/£6.34m)

The leading provider of financial solutions to SMEs, Ultimate Finance, held its AGM in Bristol last week. According to Clive Garston – Chairman of Ultimate Finance, current trading is robust and it has managed to continue to grow and expand both organically and through acquisitions. The acquisition of Ashley Commercial Finance Limited and increased facility of £34m agreed with Lloyds puts Ultimate Finance in a good position for future growth and the Board continues to view the future with confidence.

Verona Pharma Plc (LON:VRP) (VRP 11.25p/£26.86m)

AIM listed biotechnology company focused on the research, discovery and development of new drugs for the treatment of chronic respiratory diseases, has initiated a new higher dose trial of its lead drug – RPL554 in patients with asthma in Leiden, The Netherlands, with the treatment of the first patient. This study is the first of two further trials with RPL554 in patients with allergic asthma and it will determine the dosage used in further trials. This trial and the second trial will determine the safety of RPL554 at high doses and its effectiveness as a bronchodilator and anti-inflammatory drug. The trials are expected to add value and satisfy questions raised by potential development partners of the company. Verona currently has three potential drug treatments under development and continues to look for other possible drug development opportunities aimed at the respiratory and inflammatory diseases markets. Management is very credible, the company still looks undervalued.

*A corporate client of Hybridan LLP