Companies: HMY   

Marine fluid handling equipment specialist Hamworthy is looking for acquisitions after increasing profits 52 per cent to £6.4 million pre-tax in the year to March, writes Robert Tyerman.

Dorset-based Hamworthy, a world leader in gas re-liquefaction systems, gas and inert gas systems, offshore pumps and wastewater systems for oil and gas tankers and cruise ships, boosted turnover 26 per cent to £114 million in 2004-05, while orders rose £27 million to £153 million and year-end cash increased from £3.6 million to £11.3 million. Chief executive Kelvyn Derrick says the company is now ‘looking more seriously at acquisitions in this fragmented industry and we would like to make one or two’.

The increase in Hamworthy’s share price from 109p to 233p since former owner Nikko Principal sold it for £40.3 million last July in an AIM placing handled by broker Collins Stewart should help. In November, the company won eight re-liquefaction orders for North Sea vessels, where it converts burnt-off gas back into liquid form, and has since win another four orders, each worth around £5 million, which will be delivered between next April and the end of 2006.

Hamworthy is ‘shooting for more’ such orders from Korean shipyards, says Derrick, who concedes there is some competition. Pointing out that the technology works only for slow-speed diesel vessels and for gas turbine craft, he is eying potential opportunities arising from a declared need for 70 ships for Qatar’s gas field.

Offshore pump business suffered technical hitches off Nigeria and the loss of a big order, but Derrick says it should pick up long term, while wastewater was hit by continued slowness in the cruise ship market. Hamworthy, which designs and makes some equipment and out-sources other items, reports a ‘much better year’ for inert gas kit, whose manufacture it has shifted from Norway to China.

Despite their rise, the shares could still repay long-term investment.

Hamworthy	AIM	£92.64m	204.00p	4.00p
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