Gas Turbine Efficiency

After a strong 2008, Gas Turbine Efficiency continues to grow in the new year, seemingly untrammelled by any recessionary effects.

Results for the year to December showed an encouraging swing from $2.9m (£2m) of losses to pre-tax profits of $0.9m, as sales nigh-on doubled from $17.8m to $35.1m. Revenues at the more mature aviation arm grew by 33%, while at the newer industrial and combustion division, sales increased by 124%.

The ability of GTE's technology to deliver fuel, operational and environmental benefits has attracted a number of new aviation clients, especially to its joint venture with engine maker Pratt & Whitney. Chief executive Steve Zwolinski says increasing demand from military customers, including the US air force recently, should make for ‘a more predictable deployment’ and that the enforcement of Kyoto protocols in 2012 ‘will be a big boost’.

But it is for the industrial arm, focused on cleaning the turbines used in the power generation and oil and gas sectors, that he retains most of his excitement. ‘It is a much larger market and we are aligned with consumable parts that need to be serviced more often.’

This latter market has high entry barriers and with the GTE team here seen as ‘the go-to guys’, with years of experience at GE (General Electric), Zwolinski says ‘we are now in much higher-level strategic discussions’ that could lead to lucrative worldwide framework agreements.

GTE's order backlog for 2009 has already grown by 52% to $26.7m since the start of the year, leaving forecast 2009 sales of $47m, $5.8m of EBITDA and EPS of four cents (2.8p) looking eminently achievable.

Already up ten per cent since they were backed here at 24.5p in March, GTE's shares remain well set to continue their resurgence. Keep buying.

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