US-based TyraTech, the second AIM spin-out from XL TechGroup, has developed a range of naturally derived products for the pesticide market, many of them in partnership with multinationals.

This explains a market price tag of more than 30 times last year’s $5.5m (£2.8m) sales. But the omens are good and sales are expected to fly, with house broker Nomura Code forecasting a fivefold leap to £25.2m this year and profitability in 2009.

With concern escalating regarding chemicals used in agriculture and – even closer to the consumer – in hotels, restaurants or the home, there is a huge market opportunity for naturally derived products. Furthermore, the company is working on developing ‘functional food’ products to kill intestinal parasites in humans and animals.

TyraTech’s technology works by combining various naturally occurring chemicals into formulae that kill insects but leave humans, higher animals and beneficial insects like bees unscathed. Furthermore, a subsidiary business sells equipment to dairy farms to turn their dung into an odour-free peat substitute and has already made first sales.

Routes to market include selling directly or signing partnerships for individual products with market-leading players. So, food giant Kraft is working on functional food, while Arysta LifeScience is working on horticultural markets.

Pre-tax losses of $16.5m last year are expected to more than halve this year, meaning that $27.5m cash left in the bank should be enough to see TyraTech through to profits. Having said all of that, the shares are for risk-takers only.

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TyraTech	AIM	£9.35m	42.50p	0.00p
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Newcomer - TyraTech			01/06/2007
XL Tech’s second spin-out			02/05/2007