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Hydro International

  • BY: Andrew Hore |
  • POSTED: 02/09/2009 |

Weaker demand for stormwater products from the construction sector hit Hydro International’s figures in the first half of 2009 even though revenues are rising from its sludge scrapers and wastewater technology.

The supplier of equipment to control and treat wastewater and stormwater reported a fall in pre-exceptional profits from £1.04m to £697,000 in the six months to June 2009. Revenues declined from £14.9m to £14.2m. This masks a sharp upturn in revenues and profit from the wastewater division.

The North American business is doing well. Exports are growing, particularly to the Middle East.

UK wastewater sales may slow due to the latest regulatory regime under AMP5. There is little sign of an upturn in demand for stormwater products from the housebuilding sector. The strengthening of the pound against the dollar will hamper US revenues.

The current trading conditions have led to a forecast downgrade from house broker KBC Peel Hunt. It has slashed its forecast 2009 profit from £2.9m to £1.72m, against £3m profit in 2008.

The shares fell 9p to 92.5p each, which values Hydro at £13.2m. The shares are trading on just under 12 times forecast 2009 earnings. An unchanged final dividend of 3p a share would provide a yield of 3.2%.

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