Hartest

Niche instrumentation group Hartest is attempting to resist the advances of an acquirer while looking to deliver an improved second half.

Although in November the multinational ‘process monitoring’ group Delta Controls made an improved cash offer of 61p per share, executive chairman Geoff Spinks says this is ‘below the level the board or our major shareholders [who own over 53%] would be interested in’. The offer period was due to expire on 31 December but has since been extended by the Takeover Panel to 1 February ‘following representations made by the advisers to Hartest’.

If the bid does not go through, shareholders should be comforted by prospects, as Hartest's board is resuming the payment of dividends and performance has historically been weighted towards the second half of the year. Moreover, the first half to September saw ‘better than expected’ profitability and this trend reportedly continued across the group in subsequent weeks.

Hartest – whose collection of subsidiaries includes a distributor of electron microscope components, a designer of electronic control systems for specialist commercial vehicles and a distributor of medical equipment – ‘slimmed down’ its board and cut overheads last year. This helped turn around the previous £290,000 interim loss to a tiny £5,000 pre-tax profit in the first half, even though revenues reduced by 6% to £9.4m.

Shares in Hartest, which have risen from a year’s low of 15p to 55p over the past year, boast speculative potential though there’s the likelihood that they could lose some of their recent gains if the offer falls through. As such, they are not for the risk averse.