Member Info for jange

SkyePharma said the European Commission had given it the go-ahead to start marketing its asthma medicine, flutiform, across the continent. The firm said the European Commission's decision was binding and 21 member states were now required to grant national marketing authorisations or approvals consistent with the decision. The news pushed shares up 28% in trading on Tuesday. SkyePharma said it was looking launch the product across Europe in the second half of this year, having been developing it since 2004. The company anticipates the marketing authorisations will be granted shortly, typically between one and three months. In other countries negotiations would be required with national pricing and reimbursement authorities before the product could be made commercially available, it said.

David Evans, Chairman, said: "As the group looks to build on its progress to date, it is clear that to achieve significant year-on-year growth we either need to increase the level of automation for customers or to provide POC tests to provide solutions for unmet needs in developing markets. "The outlook for the new financial year is very encouraging with good growth potential across all segments of the business. The addition of the new test technologies licensed in from the Burnet Institute should allow us to make a major impact in Global Health markets as these tests satisfy a current unmet clinical demand.

Medical diagnostics group Omega Diagnostics posted a strong set of full year results which saw turnover rise 41 per cent and gross profit leap 49 per cent. Pre-tax profits came in at £0.48m (2011: £0.12m) on revenues of £11.1m, compared with £7.9m the previous year. Earning per share rose from 0.1p to 0.6p year-on-year. Divisionally, Allergy and Autoimmune revenue was up 191% to £4.48m (2011: £1.54m), Food Intolerance revenue rose 10% to £3.90m (2011: £3.56m) and Infectious disease/other revenue declined 2.0% to £2.75m (2011: £2.80m). Net cash generated from operations during the year was £0.69m (2011: £0.35m), while cash at year end was £1.16m (2011: £2.05m), which the company said reflected iSYS development expenditure. Net debt at the period end was £0.1m (2011: net cash of £0.45m)

Other key targets, he said, were to move towards establishing the firm's own cocoa plantation and, in the maize business, to build on its export markets. Clayton says Africa focused Agriterra, which wants to become a leading food supplier, offers investors a stake in a high growth sector where there are not many listed vehicles.

These talks are aimed at securing the firm's own cocoa plantation, which would allow it to enhance the firm's traceability and sustainability, attracting premium prices, said Clayton. Plantations being considered had old cocoa in them, where Agriterra may be able to extend their economic life, he added. In the group's maize business, the period saw an excellent buying season with 34,000 tonnes of maize purchased - representing a 9,000 tonne increase on the comparable period in 2010. Indications now suggest that the current strong demand for grain may continue through the second half of this year and into next year. The group also reported rapid progress at Mozbife - its beef business. Cattle numbers at the Mavonde and Dombe ranches are growing rapidly and are on track to reach 10,000 head by 2015, while the Vanduzi feedlot is now operational and has a capacity of around 2,000 head

Looking ahead, Clayton said he believed three businesses will be making a contribution to overheads. He highlighted the good performance of cocoa subsidiary Tropical Farms Limited (TFL), which is already contributing US$1.4 million to revenues. Clayton said TFL had been acquired last July as an undercapitalised business but that Agriterra's investment had enabled it to develop. And the firm has ambitious plans for the subsidiary - aiming to expand its cocoa operations to 40 locations from 12, and revealing last week it had bought a five acre site in the country's third largest city to develop a processing facility. The company has also told investors it is in negotiations to acquire new land for a cocoa plantation.

A dividend is also on the cards soon. Murria had previously indicated that the company would consider it once it had cleared its debt and so investors can look forward to the possibility of this by the end of the year. Darley says that this potential maiden dividend, combined with earnings per share growth and further debt-funded acquisitions will all contribute to positive momentum for the share price going forward.

It also now has full NHS compliance; something Murria says the company has worked very hard to achieve and is looking to make the most of. She adds that the public sector is finally waking up to the fact that technology is the way forward. Currently, revenues are split 50/50 between the public and private sectors, but going forward there may be a shift towards the public sector. One highlight last year was sealing a £17 million contract with Northern Ireland Department of Health, Social Services and Public Safety and it is looking to build on this success elsewhere. The product portfolio has been expanded to include Advanced Community and Advanced Mobile Communications and Darley thinks the company’s relationships with Orange and Vodafone are “progressing well”. “Further mobile operators could potentially be added if terms were agreeable, and the service also has the potential to be white labelled to other healthcare specialists,” he said. The company saw revenue growth of 10 per cent to £98 million in the year to February with adjusted pre-tax profits up 13 per cent to £21 million.

The firm reduced the net debt from £31 million to £1.1 million last year and has cleared £50 million of debt in the last two years. “This, combined with around £25 million EBITDA last year, puts the company in a great position to make further acquisitions,” she told Proactive. “The opportunities are organic and cash-rich,” she added. The business has three divisions currently: Advanced Health & Care, which services the NHS and private healthcare sector, Advanced Business Solutions and Advanced 365. These three components provide a range of software and IT services designed to run businesses more efficiently and cost-effectively. Organic growth is being driven by the world becoming increasingly mobile and tech-friendly. Mobile users rose by 200 per cent in the last financial year to over 13,000, but the potential market is well over 400,000 and this year the aim is double that mobile user base again. Advanced has two mobile applications, iNurse and iConnect, aimed at the NHS. These are mobile patient management systems that allow nurses to visit patients at their homes and record the information remotely, keeping both the patient and next of kin up-to-date with goings-on. Murria says this allows nurses to make 2 or 3 more patient visits every day and increase productivity by 20-30 per cent.

Advanced Computer Software (LON:ASW) should see its share price climb further if it gets back on the acquisition trail this year, says broker finnCap. Andrew Darley, analyst at the broker, reckons that 2012 was a quiet year financially for the company but the lack of material acquisitions “confirmed the underlying growth within the model”. “FY12 was unusually and deliberately quiet for ASW in order to establish a clean set of financials to display the underlying performance of the business,” he added. Open Logistix was a small acquisition (£1.2 million) in March 2011 and the company also bought Fabric Technologies four months ago for £4.6 million. But since then things have settled down. This is not for want of opportunities however, as the company has been holding back so it could pay down its debts; and now it has done so. With the £14.8 million sale of Cedar HR and two years of strong cash generation, the slate has now been wiped clean. Chief executive Vin Murria sees this as an important step for the company as it grows further

“We floated in June last year somewhat on the back of that excitement. At the same time there was no hard data.” He believes however that data sharing will help entice investors back. Drilling activity on San Leon’s (LON:SLE) adjoining acreage, for example, “will certainly help the investor community further advance their understanding of the potential of shales,” he stated. With a total of 22 new shale wells expected in Poland in 2012, most of which are vertical and one of which will be drilled by 3Legs, Fraser expects the newsflow to provide further clarity. 3Legs is now also targeting further unconventional oil and gas resource opportunities. “We view the company as an independent, nimble, fast-mover, able to get into new unconventional assets and opportunities at an early stage,” said Fraser. “That’s what we did in the Baltic Basin – we were first in there. We secured the only shale concessions in the Baltic Basin in 2007. “And we want to replicate that sort of achievement elsewhere if we can. It might not necessarily be through licensing, it might be through other types of participation – farm-ins for example, or joint ventures.” As 3Legs certainly has the firepower with its hefty cash balance, the question is where. “We’d prefer to be in Europe but we will also look at other areas in the world which we consider a company of our size can operate in safely and effectively,” Fraser concludes.

and that’s what we need to see happen now,” he said. “It can take half a dozen or a dozen horizontal wells to really understand the commercial viability of a new shale basin,” he added. Fraser maintains that Poland is the best market to be in for gas. “Poland is a very attractive market for shale gas exploration. They import 70 per cent of their gas from Russia. They are very keen to reduce that dependency for a lot of reasons, so the incentive in Poland to develop domestic gas reserves is absolutely huge.” He added there had been huge government backing, as well as “a clean bill of health” from the Polish Ministry of Environment relating to environmental concerns about the fracking operation. Looking forward, the company is considering retesting both of its two existing horizontal wells to gain a better understanding of the potential of its Polish concessions, after which Fraser believes the company will have a far clearer idea of the commercial upside. “There is no guarantee of long-term success until you know what the likely commercial returns from the acreage are. And no-one has any idea of that yet.” Fraser believes that the hype about shale gas from last year has contributed to the current weakness in the share price. “The pendulum’s gone the other way against Polish shale right now. But there was a little bit too much hype last year and that’s really what we’re paying for now,” he said. “There were few places for investors to look for investing in shale gas in Europe, so they piled into a small number of companies and those share prices did very well.

3Legs’ chief financial officer Alex Fraser claims the results from the first well in particular in fact showed a good flow rate but that investors were expecting better. “Mechanically, the frac job was successful. The flow rate wasn’t as good as investors were looking for. We consider it was actually quite a reasonable flow rate,” he said. US energy firm ConocoPhillips (NYSE:COP) must think so, as it recently exercised its option to acquire 70 per cent of 3Legs’ Baltic concessions. Broker Jefferies believes that the ConocoPhillips deal is a “positive signal of the potential of the blocks”, and has a target price of 230 pence per share for 3Legs. The broker added a note of caution however: “Key risks remain proving commercial production rates for Polish shale.” Fraser told Proactive Investors that this will take time. After all, the company had originally promised to show its wells were commercially viable in 18 to 24 months after floating last June. “It’s difficult to really form a view about it – the long-term commercial potential – until you see more horizontal wells drilled and that’s what we need to see happen now,” he said.

After shale gas burst onto the US market in recent years, the focus has now shifted to finding available resources in Europe, and 3Legs has drilled the only 2 horizontal shale gas wells (Lebien LE-2H and Warblino LE-1H) on the continent, according to the company. However, there have been concerns about the economic feasibility of shale gas in Europe, given the complicated drilling techniques required to access the gas. Shale gas is natural gas trapped within shale formations, which can be rich in petroleum and natural gas. Hydraulic fracturing (or “fracking”) is applied, where water, chemicals and sand are pumped into the well to unlock trapped hydrocarbons by opening the fractures in the rock and allowing natural gas to flow from the shale into the well. This technique, in conjunction with horizontal drilling, makes shale plays commercially feasible. And with initial flow rates from 3Legs’ Lebien LE-2H and Warblino LE-1H wells below forecasts at 450-520 mscf/d and 18 mscf/d respectively, concerns have also been raised as to whether or not it really will prove to be a commercially viable option.

3Legs Resources (LON:3LEG) is an unconventional oil and gas resources company with big ambitions for shale gas in Europe. The Isle of Man-headquartered group, which was formed in 2007, has six exploration and prospection concessions covering approximately 4,387 square kilometres (1,084,000 acres) in the onshore Baltic Basin of northern Poland. As well as the Baltic concessions, 3Legs also holds exploration licences near Krakow, southern Poland, two licences in Baden-Württemburg, south-west Germany, while two further licence applications have been submitted in southern France. The company raised over £58 million in 2011 through an initial public offering (IPO) on AIM last June, and had cash of £50.9 million at year end, compared to £1.6 million in 2010.

Bad debts in the Eurozone are a "ticking time bomb" for the continent's economy, with the worst effects expected to be felt next year, a report has warned. Banks' balance sheets will contract by a record margin in 2012, further constraining the supply of credit to businesses and consumers, according to Ernst & Young, but the "real impact" of Europe's debt crisis will not arrive until 2013. The accountancy firm said banks will shrink their balance sheets by €1.6tn (£1.3tn) this year as the result of asset disposals and a contraction in their lending activity - a sharper decline than during the financial ¬crisis. As a result, it predicted that corporate lending will contract by 4.8% in 2012, while consumer loans will fall by 6.6%, which would represent the fastest pace of lending contraction on record for the Eurozone. However, next year looks even more "bleak" as the fallout from bad debts is felt across Europe, Ernst & Young's Eurozone Financial Services Forecast said.

Novae Group: Peel Hunt downgrades to hold, target cut from 416p to 362p.

Lancashire: Jefferies keeps buy rating and 910p target.

Hiscox: Jefferies ups target from 452p to 490p, buy rating retained.

Halfords: Panmure Gordon downgrades to hold, 256p target price unchanged