Pressure Technologies (PRES) has won two orders for biogas 'upgraders' worth £4.6m in all. It might not sound much, but this is a potential game-changer, a fact reflected in the subsequent share price rally for the small engineer. It was also something we flagged in our well-timed buy tip (187p, 27 Jun 2013), currently showing a 66 per cent gain. Despite that, we think the shares remain cheap and that further gains are likely.
Up to now, Pressure Technologies has made most of its money selling seamless steel cylinders for oil rigs and submarines. But with UK regulatory issues resolved, the biogas division could take off, too. The company's equipment strips out unwanted gases from biomethane, making it fit for utilities to pump into the national gas grid. In June, chief executive John Hayward told us of "well over 10" opportunities worth up to £2.5m each. And long-term monitoring and maintenance contracts will provide another lucrative income stream.
Directors have also given investors a big clue in recent weeks. Last month we spotted non-executive director Nigel Luckett had spent over £39,000 on shares, and just a few weeks ago finance boss James Lister stuck over 20,000 shares in his Isa at 242.5p each.
