Densitron

We recently recommended shares in Densitron (DSN) and the electronic displays minnow has repaid our faith with a solid set of figures.

In the six months to June, sales increased 31% to £11.3m as pre-tax profits soared more than five-fold to £504,000 (2010: £97,000). Despite the recent payout of a 5p a share special dividend, shareholders are to benefit from a doubling of the interim payment to 0.2p a share.

Orders booked in the first half rose 6% to £11.2m, though stripping out a large one-off £500,000 order gain last time the underlying growth was nearer 10%. Sales in Europe stepped up 26% to £5.9m, as gross profits increased 15% to £1.3m. Growth in the US was good, however Asia proved the star performer - here sales leapt 75% to £1.4m.

Speaking to Growth Company Investor, finance director Tim Pearson said 'despite the global economy, we are encouraged that our business is moving in the right direction.' On future growth he highlighted the intention to open an office in India next year, to tap into its 'massive economy' and the 'huge number of leads it receives.'

Densitron has withdrawn its appeal against the rejection of planning for the 1.25 acre strip of land it owns in Blackheath, this will be a slow-burn is potentially very valuable. Broker Westhouse forecasts 2011 pre-tax profits of £1.3m and EPS of 1p. We suggested buying Densitron in June at 10.5p, with the price currently at 11.625p we retain our view. Buy.