27 July 2016

Hydrodec targets USA

Robert Tyerman

Recycled transformer oil pioneer Hydrodec plans a £15 million push into the USA, after winning approvals and orders in Australia.

Mark McNamara, chief executive officer of AIM-quoted Hydrodec, described approvals won from the State of Victoria’s two largest electricity distributors for the company’s “Superfine” transformer oil – made from “degraded” waste oil – as a ‘watershed’. A large South Australian utility has also approved Superfine, which recently won a 22p-a-litre federal subsidy under the Australian Oil Product Stewardship programme.

Chaired by long-term backer John Gunn, the former City tycoon who now supports early-stage and often green-tinged ventures, Hydrodec is in line for ‘three big contracts’ that will take half the capacity of its one operating plant in Young, New South Wales, according to McNamara.

He claimed the company should now be able to grab 30 per cent of Australia’s transformer oil market, where transformer maker Schneider Electric has already agreed to use Superfine.

McNamara said all this could take Hydrodec into profitability in the second half of this year, after cutting its losses in 2006 from nearly £6 million to £2.8 million. But the big prize is the US market, where Hydrodec can present Superfine as green – in that it uses up waste oil – as well as being cheap and reducing American dependence on imported oil.

The company has received planning permission for a plant in Ohio and plans a second facility in Mississippi. McNamara said Ohio should start producing in late 2008, with Mississippi on stream early the following year.

The cost would be around £15 million and McNamara suggested there is an offer of a debt and convertible finance package on the table from a major US corporation. A third facility on the West coast of the USA might be considered later on.

‘Hydrodec will grow tenfold in 24 months,’ boasted McNamara. The company, which eschews joint ventures in a bid to guard its patented intellectual property, reckons it has many other uses besides transformer oil.

Floated at 5p in 2004, Hydrodec shares reached 37.5p in March last year, but now trade at 26p, down 0.5p this morning and valuing the company at £48 million. If the orders do come and the financing offers come through, they could find new favour.

Cash Shells 2015

Published in September 2015 this annual research report provides a comprehensive overview of cash shells on the Main Market, AIM and PLUS landscape. Order your copy today

 

Superb investment toolkit for private investors

SharePad is the new web-based service from ShareScope. Easier to use and more powerful. Perfect for tablets, Macs and Windows PC. Covers ALL your investment requirements.

Growth Company Investor: free trial

Since 2008, our share tips outperformed the benchmark by 281%. Take a free trial and get access to our recommendations today. Start free trial now.

Directors' Pay on AIM 2015

The most comprehensive review of AIM directors' pay available, and this year includes a record sample of 1000+ AIM-quoted companies. The full report is available to order for £385 + VAT. Click here for more info

 

Latest small-cap and growth company news

Daily coverage of small-cap company stocks on London's junior markets AIM and PLUS, breaking news, stock research and latest share price information for investors. Full sector coverage with all the latest news on smaller listed companies, updated several times a day with financial reports, trading statements and links to further web resources.

Popular News

Latest News

Synectics on the road to recovery

Synectics (AIM: SNX), the surveillance systems specialist, is on the road to recovery. The shares were hit badly by the downturn in the oil and gas industry which historically has been a key customer. Happily the slack is now being taken up elsewhere, with the order book up 34 per cent from the start of the year.

Profit from playing by the rules

One ‘industry’ that has boomed over recent decades is compliance. Everything has become a lot stricter as far as rules and regulations are concerned. It’s not enough to abide by the processes of our workplaces, we also need to demonstrate that proper procedures are in place and are being complied with. That’s good news for Ideagen (AIM: IDEA) whose software helps over 2,000 companies in regulated industries manage their governance, risk and compliance.

Collagen targets a step up in scale

Collagen Solutions (AIM: COS) results gave new CEO Jamal Rushdy an opportunity to set out his strategy for the company. Collagen has an unusually broad geographic footprint for a company of its £13 million size. The plan is to use this platform to exploit Collagen’s expertise in tissue engineering, both through contract manufacturing and developing its own medical devices.

Concepta Diagnostics reverses into Frontier shell

Cash shell Frontier Resources (AIM: FRI) has announced the reverse takeover of Concepta Diagnostics. Concepta is focused on women’s fertility and plans to have its first product in the market shortly.

Beam me up

Satellite Solutions Worldwide (AIM: SAT) has just pulled off a significant acquisition which increases its user base by 40 per cent. Avonline is a major UK competitor in satellite broadband and is being acquired for £10 million, funded by a further financing agreement with the Business Growth Fund.

Plastics looking to expand

Specialist manufacturer Plastics Capital has released an encouraging set of results and is looking to move into expansion mode. With 45 per cent of sales exported from the UK, the recent devaluation of sterling will be a help. Management also feels that the business is now on a stable footing after encountering tough conditions in the resources sector and emerging markets during recent periods.

More News