SPI Lasers beamed onto AIM in 2005 and almost reached 300p, before technical hurdles cut into forecasts and took the shine off the share price. Nevertheless, exciting long-term growth looks assured at the Southampton-based group, which designs and makes optical fibre-based lasers used to mark, weld and cut in a slew of sectors.

Chief executive David Parker’s 2006 trading update, ahead of annual numbers out in March, caught the eye and restored confidence in the company. He said sales for the year would hit the revised £7m forecast following a strong fourth quarter – representing 100% growth over 2005 – and cheered analysts and investors with new orders. Adding to some US$2m (£1m) of orders announced in November, Parker reported further orders and new framework deals worth more than $6m within the medical, marking and micro sectors – orders that will start shipping in the first half of 2007.

SPI, which sees opportunities for its high-powered lasers in the defence sector, is also making inroads into ‘verticals’ such as diamond processing and power cells, auguring well for growth prospects. ‘The fibre laser that we’ve invented,’ assured Parker, ‘is a high-performance laser applicable to a number of sectors. And what’s more, fibre lasers are gaining traction within, and growing faster than, the overall laser market.’

One bear note struck was news that costs are increasing as the group expands and establishes itself in the US and Asia, prompting house broker Panmure to widen forecast 2006 losses to £11.1m. For 2007, losses of £6.3m from £20m sales are predicted, ahead of possible pre-tax profits of £3.2m (downgraded from a more optimistic £6.2m) from a top-line £35.5m turnover in 2008. The shares are not for selling. Hold for the long term.