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Proventec builds up profits

Proventec has an alternative way to battle MRSA

Proventec's latest results and prospects suggest that this year’s share price fall is overdone.

IC TIP: Buy at 8.625p

The company came to Aim via a reverse takeover of two Dutch businesses providing steam-cleaning processes and fire-retardant coatings. In June 2007 it bought 80 per cent of Contico, a manufacturer and distributor of 2000 cleaning items from buckets to wet floor signage to vacuum cleaners and spray bottles. It cost £5.5m and contributed three months turnover of £4m and about £95,000 of profits to the first half figures.

Proventec needs Contico’s cash flow to finance development and sales of its two original products. Healthcare studies at University College London Hospital are said to show that its dry steam cleaning vacuums can eradicate both MRSA and Clostridium difficile. One difference between its product and other ways of eradicating dangerous diseases is that high temperature steam cleaning can be used not only on walls and floors but also on beds and mattresses where bugs lurk. Magma fire retardant products seem also to have performed well although the big winner there may be a coating which protects signs from fading in ultra-voilet light. Shell’s yellow and red logos are so protected in Holland as are the signs at Legoland, west of London.

Broker Dawney, Day estimates that 12 month sales will jump from £4.96m to £14.13m with profits rising from £1.31m to £1.84m. Earnings are forecast to increase from 0.46p to 0.59p a share. Debt is also modest following a £1m placing in June at 9p.


TOUCH:8.5-8.75p12-MONTH HIGH:9.75pLOW: 7.625p

Half-year to 30 SeptGross revenue (£m)Pre-tax profit (£000)Earnings per share (p)Net div per share (p)
% change+306+218+71
Aim: Specialty chemicals

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