Lower voltages spark Cinpart

A dramatic revival has been gathering momentum in the affairs of electrical components maker Cinpart, hitherto a loss-making manufacturing concern with a production base in Thailand, which transformed its profile
and prospects last March by establishing a new energy-efficient subsidiary, Active Energy.

The company began with 65 per cent of Active Energy, which makes and distributes ‘VoltageMaster’ equipment for cutting superfluous voltage from input electricity for lights, heaters and other machinery, and which is certified by the Carbon Trust as helping meet European Union targets for carbon emission reductions.

Steered since the end of 2007 by Kevin Baker, former operations chief at the company’s Derlite electrical components division, and now with 72.2 per cent of Active Energy and claiming VoltageMaster can reduce commercial users’ electricity bills by 20 per cent, the Hammersmith-based company has been winning new contracts. These include a £1.18 million deal in June to supply VoltageMaster units to a leading affordable home concern and a successful tender in September to supply members of the Eastern Shires local authority purchasing organisation, worth an estimated £15 million.

After losing £338,000 in 2008 on £2 million turnover and £650,000 in the first half of 2009, Cinpart now looks poised to move into the black. Analysts predict pre-tax profits of £1.8 million this year and £4 million in 2011.

The company, at which another director, Christopher Foster (formerly of the ill-starred Wiggins property group), has been playing an active role, raised £1 million before Christmas at 12.5p to set up subsidiaries in Australia, Thailand, southern Europe and elsewhere. Foster has subscribed for almost a quarter of the placing, which will help establish companies to sell and install VoltageMaster equipment.

Cinpart’s factory in Thailand will supply to these overseas markets, while SDC in Scotland, owned by Stephen Coomes, the original inventor of VoltageMaster, will continue to supply the UK market. Coomes now owns 27.8 per cent of Active Energy, which recently said it was in ‘preliminary discussions’ with ‘a UK-focused blue-chip energy supplier’ about forming a strategic partnership to develop new markets for VoltageMaster.

Directors argue that moves towards European Union voltage harmonisation should stimulate interest in VoltageMaster. They also contend that it could benefit 85 per cent of commercial buildings in Britain.

Floated at 15p 12 years ago, Cinpart shares had collapsed to 1.88p before the company’s fortunes began to change. VoltageMaster, which boasts the potential to save companies, public bodies, hospitals, hotels and the like significant chunks of their electricity bills, is changing the stock market’s perception of Cinpart.

This has helped with fundraisings before the latest £1 million. Directors contributed £65,000 to an earlier £775,000 placing at 10p to help strengthen Cinpart’s sales force and build on a previous £1.2 million contract win. That followed an earlier £730,000 funding at a lowly 2p to provide working capital for Active Energy, and to adapt its own factory in Thailand to produce VoltageMaster equipment. But, though Active Energy is the key to Cinpart’s revival, it is by no means a one-product company.

Derlite recently won a £560,000-a-year contract to supply spark electrodes to Burner Systems International in the USA, Mexico and France, and another division, Gasignition, makes components for European gas equipment makers. Both had a tough 2009, but are expected to break even this year and make money in 2011.

VoltageMaster is not the only product in its field, but it seems to be gaining encouraging recognition. The shares have already rebounded strongly to 17p, but, in view of the company’s potential performance, they could spark higher.