Ethanol group Renova Energy is building its US production and distribution network after lifting first-half profits to £328,000.

AIM-quoted Renova is developing a system of production, distribution and marketing for ethanol to be blended with petrol in the American midwest, where it not only reduces carbon emissions but attracts tax breaks for Republican-voting farmers. The company, which floated in June at 69p, increased pre-tax profits 19 per cent to $479,000 pre-tax in the six months to September on turnover up eight per cent to $7 million.

More significant, however, for the company, which raised £1.7 million at 140p in September, are the steps it is taking to expand its plant capacity from five million gallons to 12 million gallons and expand its distribution network. Chairman Chris Thomas says the plant expansion at Torrington, Wyoming, should be completed by next June, while a feasibility study is underway into re-developing a disused ethanol facility at Heyburn, Idaho, into a 15 million gallon dry-corn processing plant.

At 152.5p, down 9p this morning, Renova shares have risen from 91.5p when Growth Company Investor first recommended them in August. Hold on.

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