20 August 2014

Hydrodec hails transformer deal

24/08/2006 Robert Tyerman

Profitability is now in sight claims 'green' oil technology hopeful Hydrodec following a bulk order for its 'Superfine' transformer oil.

AIM-quoted Hydrodec, set up to commercialise Australian technology to remove harmful contaminants in oil refining, says written acceptance from a major transformer manufacturer Down Under and conditional acceptance from another for bulk use of Superfine could ensure a firm market for at least half the capacity of Hydrodec's newly-commissioned refining plant in New South Wales. That, says the company, should generate annual revenues of £1.8 million, underpinned by feedstock supply commitments from major utilities.

John Gunn, the former City tycoon-turned young company backer who chairs Hydrodec, says the company, which lost nearly £6 million last year, will now be 'cash-flow positive next month and profitable in the fourth quarter'. The New South Wales plant is 'on time, and under budget' and should reach 80 per cent capacity by the end of the year and hit its full 20,000-litres-a-day potential by the first quarter of 2007.

He says the contracts 'go on', without a set termination date, and argues that Superfine faces a 'virtuous circle'. It is 'very "green" and self-sustaining': once used or filtered, it can be re-used and re-refined and 'we will refresh it and give it back over the long term.

'We have done the tests', explains Gunn, 'and the product comes up better than new after this process, with even less sulphur second time round'. With a management team boasting senior experience at chemical giants Dow , Du Pont and ICI, he says Hydrodec now intends to build a new plant and is weighing whether to site it in the USA, Japan, Turkey or Germany.

Gunn insists Hydrodec, which ended last year with £3.3 million cash and put a value of £7.3 million on its patented technology, is not looking for joint venture partners. 'We will need no new money until we have to build the new plant', he asserts.

At 28.75p, Hydrodec is a long-term gamble, which could pay off handsomely if present hopes are realised.

Growth Company Investor’s award-winning team offer outstanding share recommendation performance. Get immediate access to all these recommendations – click here.

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 2014

The most comprehensive review of AIM directors' pay available, and this year includes a record sample of 1,044 AIM-quoted companies. The full report is available to order for £365 + 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

RapidCloud buys Exxelnet 15/08/2014

Malaysian cloud computing specialist RapidCloud (AIM:RCI) has completed the acquisition of Singaporean SEO outfit Exxelnet.

Tags: Acquisitions, Technology

Zanaga gets mining approval 15/08/2014

Mining group Zanaga Iron Ore (AIM:ZIOC) has won approval for a licence within the Republic of the Congo.

Tags: Mining

Seeing Machines starts Chile JV 08/08/2014

Seeing Machines (AIM:SEE), the company which develops technology that monitors driver fatigue, has begun a joint venture partnership in Chile. 

Tags: Mining, Technology

Aureus gives Ebola update 08/08/2014

Aureus Mining (AIM:AUE), which operates in Liberia, has given an update on how the disease has affected its operations.

Tags: Mining

Cash shells hit eight-year high 31/07/2014

Research by Growth Company Investor into cash shells has found the number has hit an eight-year high.

Tags: Cash Shells

San Leon starts drilling in Morocco 31/07/2014

Oil play San Leon Energy (AIM:SLE) has reported that its partner Genel Energy has begun drilling off the coast of Morocco.

More News