A sharp increase in spending and slow work commercialising its products have swelled losses at Pursuit Dynamics, forcing the fluid processing technology company into a deeply discounted rights issue that has sliced the share price in half.
Asking shareholders for £9.4m at 100p a share, just eight months after a cash call at 250p, has not gone down well. Still, chief executive Roel Pieper isn't hanging around to take the flak, resigning after a two-year stint. Management thinks the extra cash should tide the company over until the business starts making a profit, which could be as early as 2012, according to ambitious targets, driven by revenue of "not less than £22m." It will need at least one transformational deal to achieve that, though. True, sales did grow substantially during the period, driven largely by contracts with food companies and brewers. There was also a first contribution from bioenergy thanks to take-up of its cost-saving ethanol reactor system by US plants. Growth was disappointing, though, stunted by delays caused by ineffective testing and installation issues; not good when cash outflow from operating activities has doubled to £10.9m. Elsewhere, Procter & Gamble says it needs more time to evaluate Pursuit's technology, and sewage treatment trials with Thames Water are ongoing.
PURSUIT DYNAMICS (PDX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 91p | MARKET VALUE: | £ 66.5m | |
| TOUCH: | 91-93p | 12-MONTH HIGH: | 526p | LOW: 78p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE | 11p | NET CASH: | £7.3m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 3.05 | -6.61 | -11.8 | nil |
| 2008 | 0.46 | -7.07 | -11.5 | nil |
| 2009 | 0.05 | -6.93 | -10.6 | nil |
| 2010 | 0.13 | -9.07 | -12.9 | nil |
| 2011 | 0.49 | -15.3 | -21.3 | nil |
| % change | +277 | - | +65 | - |
Ex-div:NA Payment:NA | ||||
