Pressure Technologies (232.5p) joined AIM in June 2007 through a placing at 150p per share. Since that time, the business has progressed well and, in stark contrast to a brutal time for AIM, the share price has actually moved significantly upwards. With a positive outlook for 2009, this looks to be a solid investment opportunity and, although the rating is higher than many other smaller companies, this is supported by an impressive track record as a listed entity and the net cash position. While almost every company looks like a recovery play at the moment, it is refreshing to see Pressure Technologies growing and beating expectations. The company designs, manufactures and offers services for a range of high-pressure, seamless steel gas cylinders. In June 2005 the company relocated to its current manufacturing facility in Sheffield.

Final results were released on December 9, covering the year to September 27. Revenue increased significantly, rising from £15.1m in 2007 to £23.7m this time around. A profit before tax of £5.0m (2007: £1.4m) was recorded, which translated into basic earnings per share of 31.6p (2007: 10.9p). A maiden final dividend of 4.0p per share was declared, providing a total of 6.0p for the year.

At the year-end, the order book stood at £23m, which is a record level (2007: £18m). Net funds at the year end were £5.9m (2007: £4.6m) and the sound balance sheet should allow the company to make acquisitions should it wish to do so. This remains a highlighted target but the company will not make acquisitions without careful consideration.

This appears to be a company which is going places and it should be well placed to ride out the current turmoil in the world economy. From a prospective investor’s standpoint, it is a shame that Pressure Technologies’ share price has performed so well. There are other shares that look cheaper based on historical results, but many of these look much riskier. Pressure Technologies’ healthy balance sheet and the position it enjoys in an interesting sector should mean that it is a solid investment opportunity.

There are still several areas where growth could be achieved and the management team appear keen to drive the business forward. This will require a great deal of determination given how far the company has progressed in recent times and the rapid growth in profitability achieved of late will not be repeated. As things stand, it is still difficult to find fault with a business which has continually beaten analysts’ forecasts.

WARNING: Opinions expressed are the writers’ judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.