Companies: HMY   

Fluid handling specialist Hamworthy increased interim pre-tax profits 14 per cent to £6.5 million and turnover 30 per cent to £106.2 million.

AIM-quoted Hamworthy, a world leader in designing and manufacturing innovative marine and offshore systems, blames the margin pressure in the six months to September on cost overruns on one land-based liquefaction project, now completed, and delays on ordering from customers for high-margin offshore inert gas systems. The acquisitive Poole, Dorset-based company says operating profits in its water systems division more than doubled to £2.6 million, helped by the contribution from last year's Serck Como GmbH acquisition and strong demand for waste water systems from the cruise ship market.

However, profits were slightly down in the gas, pump and inert gas systems businesses. Hamworthy says its order intake fell 6.4 per cent to £122.7 million in the first half-year by comparison with a 'spike' a year earlier, again because of 'irregular timing' of order receipts.

However, the future order book rose 13.3 per cent to a record £304 million in the first six months. The company says demand currently meets expectations, except in the offshore floating production, storage and offloading sector, which saw 'virtually no deliveries of pump ' systems in the first half, though 'some orders are now flowing'.

Looking ahead, chief executive Joe Oatley says the 'two bright' stars on Hamworthy's horizon are 'the very robust' cruise ship market and buoyant demand for liquefied natural gas transporters. Longer term, China's declared intention to make itself the world leader in shipbuilding should augur well for Hamworthy, which is well represented there.

Oatley says the company, which had £50 million cash on 30 September, is looking for a 'more substantial' acquisition than before, though it has already refused to pay some extravagant asking prices. Recommended by Growth Company Investor at 233p in 2005, the shares hit 665p last month, but have since retreated to 543p, sharply down by 92p this morning.

Some profit taking looks prudent, though it could make sense to hold some for possible future growth.

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