Companies: PDX   

Originally recommended by Growth Company Investor at 48p, this developer and licenser of PDX pump technology traded above 260p last year, but the price has come off sharply despite real commercial progress for the half to March under energetic boss John Heathcote.

Losses widened to £1.54m (£1.3m), though Pursuit closed the half with £7.2m cash, following a £7.5m December funding. The current £250,000-a-month burn rate leaves enough financial fuel to deliver meaningful commercial profits.

There was also a twelve-fold surge in turnover to £500,000, despite the worst drop-off in food equipment manufacturing activity for years, with processors squeezing spend on retailer price pressure and spiralling input costs. Food highlights included successful sales of the PDX Sonic range, which brings productivity gains and reduced energy consumption for processing customers into Europe and the US, as well as a first repeat order from an existing licensee.

Progress towards commercialisation in brewing, where ‘every brewer has an energy committee working on how to get costs of production down’, continues apace, with Pursuit already partnered up with a ‘top five’ brewer, trials showing energy savings of 30% and other brewing majors circling. In fire suppression, where Pursuit has secured a global exclusive licensing deal with part of NYSE-listed Tyco International, ‘our giant 800-pound gorilla’, first sales could burn through in 2007.

Heathcote is also enthused by developments with a PDX 'Basilisk' decontamination system, as well as interest from oil and gas players. Long-term prospects excite and the current price tag could prove miserly for a business that could generate a top line £2.8m this year, before moving into profits of £4.5m from £13.4m sales by 2007. Buy.