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Smallcap roundup: Cornerstone FS, Fadel Partners, Belluscura, Saietta Electric Drive

11:42, 13th February 2024
Paul Hill
PMH Capital

Lots of news out today for investors to digest across smallcap land.

Not least a positive regulatory approval for forex payments specialist Cornerstone FS (CSFSFollow | CSFS. A new CFO appointment at royalty software management and brand protection firm FADEL Partners (FADLFollow | FADL. Another major distribution agreement secured by medical devices expert Belluscura (BELLFollow | BELL. And finally, updated guidance from e-drive developer Saietta Electric Drive (SEDFollow | SED.

So let’s kick off with CSFS who said this morning that it had been granted a money services business licence in Canada, not only allowing the group to offer its trademark 'high-touch' international payment services to local businesses and individuals - after receiving numerous enquiries from clients to expand locally - but also enabling Cornerstone FS to grow internationally and accelerate its medium to long-term strategic ambitions. House broker Shore Capital Markets have reiterated their 50p/share valuation.

In terms of FADEL, the Board announced the appointment of experienced SaaS director Ian Flaherty as their new CFO, taking over the reins from existing CFO Vicary Gibbs, who would be stepping down in order to pursue other opportunities. Here (although purely guesswork), I suspect Vicary might have decided that commuting back and forth to the company’s New York head office from his UK home was proving difficult to sustain long term.

Elsewhere Belluscura inked an exciting new partnership with Sunset Healthcare Solutions - who will provide 1,600+ healthcare firms with access to both BELL's X-PLOR portable oxygen concentrator from day one, and similarly its award winning new DISCOV-R when the device becomes available in Q2'24. On top, the group has also received acceptances for >95% of the share capital with regards to its all-stock purchase of TMT Acquisition. This transaction is set to close on 19th March.

Lastly, e-drive manufacturer Saietta Electric Drive reported that it had unfortunately not been able to reach commercial agreement on an electrical steering pump contract at its Sunderland facility. Meaning the associated surplus production line would now be sold for £600k - which would duly impact SED's guidance post FY'24.

That said, things are still progressing in India where JV partner Saietta VNA remains fully engaged with its lead OEM customer regarding the mass production of its AFT and RFT technology. Here a significant step up in volumes is anticipated in H2'24.

Elsewhere, discussions with a separate Indian OEM are also ongoing regarding the potential sale of its RFT e-drive technology for a 2-wheel vehicle - targeting confirmation of 'proof of concept' by the end of March 2024.

Before that though, the Board continues to seek additional funding to take Saietta Electric Drive through to being cashflow positive. Time to be patient.


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