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Over 500 AIM companies have reported interim figures over the past couple of months. A considerable portion have witnessed their shares rise substantially, but quite a few robustly profitable ventures have yet to be noticed by the market.

Oil producers dominate AIM’s strong performers, helped by the buoyant world price, which has doubled over the past year to more than $60 a barrel. This increase tends to drop straight to the bottom line of such companies and boosts profits dramatically.

Egyptian gas play Centurion Energy doubled earnings in the first half while Latin America focused Global Energy Development and West African concern Sterling Energy also produced impressive results. This trio have already seen their share prices rise stratospherically.

Two oil plays
Others in the sector that could still have some way to go include Gulfsands Petroleum, whose shares are now a third below April’s 130p placing price. The group owns the Misan gas project in Iraq but its safer activities beside the Gulf of Mexico are currently suffering in the wake of Hurricane Rita. Nevertheless, maiden interim figures saw revenues treble to $26 million. At 100p, the shares look oversold and are worth buying in the hope of recovery.

Hardy Oil & Gas, which joined the market in June raising £15 million at 144p, has put in a cleaner performance. The Indian-focused group’s shares have shot up 60 per cent to 230p on the back of vigorous first-half figures – profits leapt 73 per cent to $4.6 million. With the oil price likely to remain high for some time, there is no reason for these profits to dip and investors should retain a healthy interest in this sector.

Metal magic
Other commodity prices have enjoyed great bull runs this year, most notably gold (which has in fact doubled in value since the start of the decade). This partly explains why interim earnings at Russian gold miner Peter Hambro Mining jumped 83 per cent to $5.9 million. That said, much of the improvement came from increasing production at the group’s mines.

Israeli group Metal-Tech reported impressive maiden figures, with revenues up 227 per cent to $55 million. This meant the specialist metal and chemicals provider produced as much profit in the first half as in the whole of 2004. The group has just opened the only foreign-owned molybdenum plant in Mongolia and, although the shares have improved by 50p since May’s flotation to 180p, they could have some way to run. Net earnings should hit £12 million this year – at today’s value of £70 million, that gives it a forward p/e of just 5.8.

AMCO recovers
Users of metals and other materials have nevertheless managed to pass on these price rises to their own customers. One of AIM’s older constituents, industrial conglomerate AMCO, has seen its shares put on 75 per cent this year to 170p after doubling interim operating profits to £2.5 million.

Much of this was down to ‘an extremely good first half’ from its structural steel activities. Earnings for the full year at this low-margin group look likely to hit 30p per share, which puts the shares on a p/e of less than six, even after this year’s rise.

Another industrial concern that has recovered strongly in the first half is Metnor. It more than doubled pre-tax profits to £1.37 million and profits for the full year should be ‘significantly ahead of last year’ suggesting earnings of 20p a share are possible. That puts the shares, at 228p, on a p/e of 11.4.
Other sectors on AIM are still thriving. The market contains some leading providers of mobile phone content services, such as WIN and Monstermob, and both reported strong interims recently. Leadcom, the Israeli telecoms play that came to the market in April, is worth paying attention to after it delivered a 400 per cent leap in net earnings for the first half.