Profits are flooding in at Amiad, the Israel-headquartered water filters and filtration systems producer and supplier.

For the half to June, chief executive Rami Treger reported a 68% surge in pre-tax profits to US$3.7m (£1.8m) as turnover gushed 24% higher to $27.4m. Earnings nearly doubled to 14.8c, allowing for a 3c dividend. Gross margin erosion to 49% (50%) reflected the US dollar weakness and the rising cost of raw material.

Driving Amiad’s markets is increased global investment in water treatment and filtration systems that improve clean water supply and availability. The company’s filters need very little maintenance and have applications across industries such as steel, power, oil and gas, pulp and paper, and the global irrigation sector. The sectors remain in demand, and the municipality sector in particular is upping spending levels on the back of rising red tape.

During the half, the US proved a growth hot spot and in Europe a contract was signed with cider producer Bulmers to install filters at its production facilities. The resolution of a severe drinking water-quality problem in Russia, emergency water treatment projects in Australian cities following drought and water treatment work clinched in the Beijing Olympic village provided operational highlights.

With order books flowing at levels ahead of last year, analysts are looking for significant top-line growth for the year. Provided margins are maintained, this dividend-paying business with a balance sheet awash with $5.9m cash could prove an intelligent recovery punt.