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Small Cap Wrap - 21st Century Tech, System1 & Reabold Resources.

Small Cap Wrap - 21st Century Tech, System1 & Reabold Resources.

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Total number of AIM Companies (Incl Susp):




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*as at close of business  30 October 2018


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*as at close of business 30 October 2018


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*as at close of business 30 October 2018               


*A corporate client of Hybridan LLP


**  Standard Listing as defined by Hybridan LLP to be a business with strictly operational activity               


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ProPhotonix (LON:PPIX) 3.75p £2.58m


“Trading conditions remain positive but challenging and the Board expects Group revenue for the year ending Dec 31, 2018 to total approximately $16m (2017: $17.7m). This slowdown in the H2 of 2018 is in part due to revenue from two key customers of ProPhotonix which have experienced declines in volumes during the period. One of these customers delayed the launch of its next generation product, which incorporates components manufactured by ProPhotonix and, as a result, revenue from this customer is expected to decline by 26%”. Now guiding for a $2m net loss and adjusted EBITDA of $0.5m.  "While the expected 2018 results are a disappointment for ProPhotonix, especially considering the significant momentum and improvement since the Group was recapitalized in 2013, our order book remains strong and we remain optimistic about the future of the business as we build our OEM partnerships along with a comprehensive portfolio of products.”


Mporium Group (LON:MPM) 4.98p £29.25m


“The technology firm delivering event-driven marketing, announced a strategic partnership with BPC Land Sales and Marketing ("BPC"), a market leading services provider to blue-chip property developers.


The partnership marks Mporium's entry into an important new growth vertical, especially so with the UK government committed to the building of 300,000 homes a year by the mid 2020's. This partnership also provides further validation of the Company's strategy of developing direct channels into new verticals, whilst continuing to build on its key agency relationships.


BPC act for some of the UK's largest house builders, including Taylor Wimpey, Berkley Group and Crest Nicholson. The company provides a one-stop shop solution that caters for the developer's needs throughout a project, from the sourcing of the raw materials through to the sale of newly built properties.”


Porta Communications (LON:PTCM) 1.35p £6.5m


Porta’s “100% owned subsidiary, Redleaf Polhill Limited, has been fully integrated into its global strategic communications agency, Newgate Communications, and will now operate under that brand.


Redleaf was founded in January 2000 by Emma Kane and, in Dec 2010, acquired and successfully integrated Polhill Communications. On 23 April 2014, Redleaf was acquired by Porta, becoming a wholly owned subsidiary in June 2018 on completion of the earn-out provisions of the acquisition agreement.”


“The merger of Redleaf and Newgate Communications Limited from an accounting perspective will result in a write off of the Redleaf brand intangible which as at 30 June 2018 had a carrying value of £0.4m. In turn this write off will reduce the annual amortisation charge on brand intangibles by £0.1m from 2019.”


Yolo Leisure & Tech (LON:YOLO) 4.55p £201m


“Simplestream Ltd, the leader in live, live-2-VOD and on-demand OTT services, has announced the launch of its Sport Video Platform. This end-to-end, cloud-based, white label solution seamlessly enables broadcasters, rights holders and distributors to rapidly launch and maintain next generation OTT services on multiple screens and across territories where the rights permit.  Yolo currently has a 6.71% interest in Simplestream.”


“Key features of the new platform include low latency streaming, live event management, automated generation of video highlights and data integrations for real-time match, league and player stats, plus immersive HTML5 based applications that can sit across any device.”


Augean (LON:AUG) 42.1p £43.69m


“Augean, one of the UK's leading specialist waste management businesses has been re-issued with a pre-assessment notification from HMRC for Augean South Ltd for a total amount of landfill tax of £18.4m covering the period from Sept 2014 to May 2018. There is an additional assessment that is expected to be received for the period from June 2013 up to Sept 2014. This pre-assessment is in addition to the £10.5m (including interest £11.4m) final assessments for Augean North announced in Oct. HMRC has invited the Group to provide any relevant information which may impact the amount of landfill tax due prior to a final assessment being issued.


We still believe that this pre-assessment is without merit and maintain our position based on the legal advice received and independent reviews of our systems.”


AFH Financial Group (LON:AFHP) 381p £159.1m


The “financial planning led wealth management firm, announced the completion of the acquisition of Premier Wealth Management Harrogate Limited, a directly authorised firm based in York. As a result of the transaction, Richard Evans together with Andrew Huby and their support staff will join AFH, bringing over £90m of FUM to further extend the operations of AFH in the North East.


Under the terms of the acquisition, the maximum purchase price is £4.5m dependent upon performance criteria of the business acquired.”


“On a pro-forma basis the business has a current revenue run rate of £1.2m, generating operating profits of £0.9m.”


FYOct18E rev £49.5m, PBT £10.06m.


Pantheon Resources (LON:PANR) 16.7p £39.66m


The “oil and gas exploration company with a 50% - 75% working interest in several conventional project areas in Tyler and Polk Counties, onshore East Texas provides the following update.


Tyler County Pipeline


Pantheon is pleased to announce that the pipeline connecting the VOS#1 well and the Enterprise gathering and processing system in Tyler County, East Texas is now hooked up and that flowing operations have commenced. The Company intends to bring the well online slowly to allow it to gradually clean up as a result of its prolonged shut-in period and will report flow rates in due course.”


21st Century Tech (LON:C21) 3.1p £2.9m


The specialist provider of tailored solutions to the transport community, solving complex operational requirements both on and off vehicle, announced a strategically important and exclusive distribution agreement with Safety Tech, a subsidiary of Vision Systems France, for the SMARTVISION 'mirrorless' Camera Monitoring System (CMS) for Bus and Coach operators and Original Equipment Manufacturers (OEMs) throughout the UK. In addition, under the agreement, the Group's subsidiary 21st Century AB in Stockholm has exclusivity to supply SMARTVISION directly to the Bus and Coach operators throughout Sweden.


The CMS comprises a number of high-definition digital cameras and monitors that replace traditional wing mirrors that improve visibility, reduce the risk of accidents and lower lifetime running costs of the vehicle. The SMARTVISION CMS is the only one of its kind approved by the Vehicle Certification  Agency (VCA) in the UK and is currently available as OEM.” 


Reabold Resources (LON:RBD) 0.72p £27.7m


Update on its onshore Californian assets


Venturini Ginnochio 3 ("VG-3") well successfully put onto production


Second well now planned to be drilled within the West Brentwood licence area before the end of the year with the aim of accelerating production


Notice of Intent to Re-Drill at Monroe Swell submitted and rig-site preparations starting


Drilling of a well on the Grizzly Island licence area deferred due to prioritisation of an additional West Brentwood well.”


VG-3, Reabold's first drill, was a significant success for the Company and has provided Reabold with production and cashflow, as well as considerable optionality as we continue to develop our California portfolio. West Brentwood, which we gained exposure in June 2018, has performed in line with our highest expectations and, with VG-3 now in production, we anticipate strong cash returns on our investment.


"California is an exciting portfolio for Reabold, and we look forward to receiving yet more results before the year end."


System1  (LON|:SYS1) 180p £22.6m


HYSep18 results from the marketing services group .


5% decline in Revenue to £13.18m (2017/18: £13.82m), 3% in constant currency      


5% decline in Gross Profit to £10.80m (2017/18: £11.39m), 3% in constant currency


74% growth in Underlying Pre-Tax Profit to £1.92m (2017/18: £1.1m)


26% growth in diluted EPS to 5.3p (2017/18: 4.2p)


£1.59m investment in Ad Ratings, of which £0.50m has been capitalised and £1.09m expensed


£3.55m Cash at 30 Sept 2018 and no debt (31 March 2018: £5.78m and no debt)


Maintaining interim dividend at 1.1 pence


“Whilst market conditions remain challenging, we believe that as our new product configurations and more competitive pricing take hold, the business will continue to stabilise and in time return to growth.  Meanwhile we will continue to keep costs under control.  We are looking forward to the launch of Ad Ratings and will continue to invest as appropriate in this new business. “ FYMar19E rev £27m and PBT £3.5m. PE c.10x. 

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