Alternative Investment Market-quoted Pursuit Dynamics is entering the biofuels market. The Huntingdon based company owns atomiser and reactor technologies which it already uses in the food, brewing, decontamination and fire suppression industries. But Pursuit’s steam-based technology can also be used in ethanol plants to make them more productive and cheaper to run.
Analysts who follow the firm believe that the biofuels market could account for half of Pursuit’s forecast revenues of £10.2 million for the year to September 2011 and help it move into profit. Pursuit’s PDX Ethanol Reactor will be installed in a number of plants over the next few months.
The company, which has worked with industry leader ICM on testing the technology, believes that 120 out of the 180 existing ethanol plants can use the system and plans to install it in 60 plants over the next two or three years. Although Pursuit will not charge for installation, it will get a share of the cost savings or revenue increase.
House broker Cenkos does not forecast any revenues for this year, but believes that Pursuit can generate revenues of £5 million from this business in the year to September 2011 and £15 million next year. Cenkos estimates the annualised income from the plants installed could reach £24 million.
The broker forecasts a profit of £500,000 for Pursuit in 2010-11. Since other parts of the business are also growing their revenues, the company is expected to generate £35.1 million in 2011-12, and Cenkos believes it can make a profit of £19.8 million from those revenues.
Market: AIM
Symbol: PDX
Price: 200p
12 month high/low: 250.5p/62p
Market cap: £140m
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