Southampton-based SPI Lasers looks particularly intriguing, not least because of its unusual history. Today the company claims to be one of only two fibre laser product suppliers in the world. Originally,  SPI was formed to develop optical components for the telecoms industry. In this capacity the group raised £35 million of venture capital back in 2000, but as the opportunities in this sector started to dry up, SPI refocused its attentions and began producing lasers deliverable via fibre optic cables.

To chief executive David Parker, who was brought in to oversee the transformation in April 2002, the potential market for this laser technology is immense. ‘The market for lasers as light sources alone is worth $2 billion,’ he explains. SPI’s lasers have many additional functions too, ranging from the precision manufacture of intricate medical devices (including stents and pacemakers), through to applications in commercial printing and product marking. ‘With something like an iPod,’ Parker notes, ‘people don’t realise that so many of its parts are manufactured by laser.’

The benefits of fibre – in comparison to other laser technologies – are plentiful. Firstly SPI’s devices are far smaller and simpler to use, with the smallest generator produced being the size of a VHS cassette. In addition, this fibre laser technology is claimed to be cheaper, simpler and far more precise than its existing competitors.

Like many similar hi-tech firms SPI still has a long way to go. As Parker readily acknowledges, buying cycles are lengthy (typically as long as a year) and he also states that the real key for SPI will be to attract suitable channel partners to sell its technologies.

Having raised a net £10.6 million on flotation last October, the company should have a degree of financial breathing space. With broker Panmure Gordon forecasting sales of £3.3 million for the full year to December 2005, rising to £10.6 million in 2006 (with losses of around £4.5 million), the shares look well worth a long-term punt.

MicroFuze rides the waves

An even more recent newcomer, having completed its own £2.5 million fundraising and flotation on 13 February, is MicroFuze International, another hi-tech industrial hopeful.
Using technology first developed by the US Department of Energy, MicroFuze’s offerings utilise microwaves to create metal alloys – a process chief executive Doug Parrish reckons holds a clear edge over more established alternatives.

‘There are three main advantages,’ Parrish elaborates. ‘The first is price. The second is the improved properties of the alloys produced, which are easier to weld because microwaves don’t change the cell structure of the base metals. The third is that it’s cleaner than other technologies as you don’t have to use the same chemicals to force a reaction and you’re not left with residual acid baths that then have to be disposed of.’
Although at an even earlier stage than SPI in terms of development, Parrish notes that ‘we own a worldwide licence over the process, except in the US where they don’t grant licences’ and says the company now plans to increase awareness of its product. ‘We’ve worked in stealth for four years but now we need a marketing arm and a production arm,’ – hence the move to AIM.
 
The cash, reasons Parrish, should afford the company two years to get things right. That said, MicroFuze has still to generate significant revenues and, as a result, all but the hardiest of investors should just watch and wait for now.