Company of the year
Bioventix develops and supplies sheep monoclonal antibodies for clinical diagnostic applications. Bioventix originally joined ISDX (Plus-quoted) in 2010 at a share price of 198p and then moved to AIM in April 2014. The share price is more than five times the original flotation price in 2010.
The antibodies can be used in tests for specific ailments and illnesses and it can take one year to develop an antibody for a specific diagnostic test. Customers include Roche, Abbott and Siemens. The majority of revenues come in the form of royalties based on the number of tests using the company’s antibodies. Two antibodies, used in tests for heart failure and vitamin D levels, accounted for nearly three-fifths of revenues in 2014-15. Newer antibodies should help to reduce the dependence on a limited number of products, while one licensing deal with a major customer for one of the two main revenue generators ends in 2017. The vitamin D-related product is expected to continue to grow in importance.
The business is highly cash generative and Bioventix has a progressive dividend policy – this year the dividend is expected to increase from 32.6p a share to 40.2p a share. Pre-tax profit is expected to improve from £3.1m to £3.6m in the year to June 2016.
IPO of the year
Bilby joined AIM during March 2015 with plans to build a business focused on gas installation, maintenance, electrical, water and building services. The customer base is local authorities and social housing organisations in London and the south east. The initial acquisition at the time of the flotation was gas installation specialist P&R Installation and Bilby subsequently bought Purdy Contracts, which provides electrical services, for £8.07m.
Safety concerns mean that local authorities and housing associations need to spend money on repairing and maintaining gas boilers and pipes. Bilby has a strong position in the gas installation and services market and it can use this to build up revenues from its customer base in other specialisations.
Earlier this year, Bilby made two further add-on acquisitions providing gas and building services for social housing and local authorities. DCB, which will cost up to £4m, provides refurbishment, maintenance and disabled adaptation services in south east England. Spokemead Maintenance provides electrical and repair services and will cost up to £8.7m. A placing raised £5m at 118p a share. Via this placing, ISDX-quoted Western Selection (WESP) invested a further £545,000 and owns 5.9% of Bilby.
P&R has won preferred bidder status for gas support work for the South East Consortium, which is a group of housing associations that manage more than 140,000 residential properties. This framework agreement starts in 2016 and lasts for four years. It could contribute £7m to revenues in 2016-17 and the margin may be better than other work. A full year profit of £3.09m is forecast, rising to £4.88m in 2016-17.
Impact company of the year
Ashley House (ASH)
Care housing and health properties developer Ashley House joined the Social Impact segment of ISDX in February but it retained its AIM quotation. Ashley House moved from ISDX (Plus-quoted) to AIM in January 2007.
Ashley House developed its first GP surgery in 1991 and it provides services to help to resource, fund, community healthcare and supported living properties. The properties are energy efficient. There is a pipeline of 32 schemes with a value of £186.7m, with the vast majority of this pipeline relating to supported living properties. This is despite the fact that there has been uncertainty about housing benefit. Ashley House blames a lack of government funding for the rentals on healthcare properties for the slowdown in activity in this part of the business since 2010.
In the six months to October 2015, revenues jumped from £5.6m to £10.6m and went from a loss to a small profit. Net debt was £2.6m at the end of October 2015. The company has £10.7m of tax losses. A full year profit of £1.1m is forecast, rising to £1.5m in 2016-17.
Executive director of the year
John McArthur – Tracsis (TRCS)
Transport optimisation services and software provider Tracsis has a strong growth record and has got into good habits, such as beating its broker’s forecasts, and that is reflected by the premium rating. John McArthur has guided the company as its chief executive since it floated at a market capitalisation of £7m at 40p a share back in 2007. The share price has risen by more than 1,000% and the company is currently valued at around £127m.
Tracsis made solid progress at the interim stage but it is expected to do much better in the second half thanks to higher contributions from last year’s acquisitions Ontrac and SEP Events, which provides events management and parking services and is second-half weighted. In the six months to January 2016, revenues increased by 19% to £14.3m, organic growth was 7%, with adjusted pre-tax profit flat at £3.2m, excluding the Australian business sold in the period. The growth came in the software and consulting operations. Sales of remote condition monitoring equipment remain flat because of a lack of demand from framework agreements. There is potential for significant sales in the US but this will not contribute in the short term.
The interim dividend was raised by one-quarter to 0.5p a share but that will not put much of a dent in the cash pile of £8m. That cash figure was reduced due to acquisition spending but it should grow until there are additional acquisitions. Full-year profit is expected to improve from £5.6m to £6.8m.
Transaction of the year
1PM (OPM) acquisition of Academy Leasing
Small business finance provider 1PM is growing rapidly on the back of the lack of lending by banks to the smaller end of the market and it has still managed to keep bad debts low. Academy Leasing was acquired for up to £12m at the end of last August. This is the company’s first major acquisition. 1PM has been growing its profit for six years having recovered from the downturn in 2008 and the strategy is to treble the market capitalisation of the business to £100m.
Warrington-based Academy provides finance for the acquisition of equipment with the leads coming from the equipment suppliers. The strategy is to provide finance for every opportunity but riskier opportunities tend to be broked-on in return for commission.
The businesses have been integrated and the management team rationalised, with the former chief executive of 1PM leaving. The chairman Ian Smith has become chief executive with three main executive directors reporting to him. These three cover sales and marketing, strategy and risk and finance. The first two came from Academy.
More recently, 1PM acquired Bradgate, which provides finance for businesses buying construction, recycling and haulage equipment, for up to £2.75m and a book of receivables for £1.6m. Full year profit is expected to nearly double to £3.1m but more importantly earnings per share are forecast to improve from 3.7p to 5.1p.
Alternative financing deal of the year
Capital for Colleagues (CFCP)
ISDX-quoted Capital for Colleagues provides finance that helps employees to invest in the businesses they work for. Last year, Capital for Colleagues raised £302,000 at 59p a share from a crowdfunding campaign via CrowdBnk. The minimum target was £250,000.
Capital for Colleagues raised £2.19m at 50p a share when it joined ISDX on 17 March 2014 and last August it became a member of the Social Stock Exchange. The company has investments in 14 employee-owned businesses, as well as a portfolio of quoted shares in companies’ that have significant employee involvement. Subsidiary C4C Ownership Partners provides advice and support to employee-owned businesses or companies looking to turn themselves into an employee-owned business.
Capital for Colleagues invested £770,000 in employee owned businesses in the six months to February 2016. Interim revenues grew from £257,000 to £364,000 but admin costs increased significantly so, excluding unrealised gains, the pre-tax profit dipped from £41,000 to £34,000. Unrealised gains slumped from £47,000 to £6,000. The net asset value was £4.2m at the end of February 2016 and £1.15m has been raised at 59p a share since then. There are still plenty of opportunities for new investments as well as additional investment in existing investee companies.
Analyst of the year
Charles Hall – Peel Hunt
Journalist of the year
Simon Thompson – Investors Chronicle
Adviser of the year
Fund manager of the year
Conor McCarthy and Darren Freemantle, MFM Techinvest Special Situations