Three men have been bending my ear recently: Wayne Money of Eruma , Barrie Whip of Crimson Tide and Miles Hunt of Empresaria. All have interesting stories to tell. All have had a tough time during the recession but I get the sense that they are turning things around and are poised to deliver some good news.
Company 1: Eruma
Let’s start with Eruma (LSE: ERU). This is a business that came onto AIM in 2005 to raise finance for the development of its counter-terrorism security blinds.
When activated by a powerful gust of air, these blinds spin through 90 degrees to form a steel grille. Extensive testing has shown them capable of withstanding 1000lb car bombs, thus protecting anybody indoors from an explosive force and flying glass.
Despite their obvious attractions – both to prevent intruders and, more significantly, to guard against terrorist attacks – these unique security blinds have not sold as readily as Eruma had expected.
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To add another string to its bow, in 2007 Eruma bought Illuminex, a provider of ‘intelligent’ lighting systems. To finance that acquisition, shares were issued at 7p. But the recession put a halt to purchases of this type of product, which led to the shares losing 90% of their value.
Now though, things are starting to look up. The security blinds have recently been sold for a building in Beirut, while Illuminex was chosen to provide a lighting system for the refurbished Bristol Airport.
Added to this, Eruma is now seeing good sales of its third product, a state-of-the-art ram-raid gate. Overall, sales are accelerating and Eruma could well cross into profit next year.
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Company 2: Crimson Tide
Crimson Tide (LSE: TIDE) also suffered during the recession, though for a different reason. Crimson creates software that can be delivered over handsets to monitor the work of itinerant workers. For example, they are used by the motorcycle riders that are employed to clean ATMs.
The trouble is that some of these bikers have not been cleaning ATMs properly and the banks have been receiving complaints. The solution is for the cleaner to take a photo of the ATM before and after cleaning. This is transmitted by the handset back to base along with the exact location at which the photo was taken, provided by geo-tagging.
Unlike rivals that adapt existing software for use on handsets, Crimson Tide writes software specifically for this purpose, and it does more than simply keep tabs on mobile workers.
It has also supplied handsets, complete with software, to 179 haemophiliac patients at St James’s Hospital, Dublin. These give instructions to the patient and also enable doctors to remotely monitor them.
The recession hurt Crimson Tide because it could not get the bank finance necessary to buy the handsets given to users at the start of each contract. This is still an issue, but with demand growing and Crimson Tide now launching its own range of standard software products, it is looking at ways to accelerate its growth and capture what Whipp believes is a major opportunity.
Company 3: Empresaria
Finally to Empresaria (LSE: EMR), a recruitment agency that has very deliberately built a global presence supplying IT specialists in Japan, engineers in China, retailers in Chile and healthcare experts in Finland.
Despite this diversity, Empresaria’s stock market rating is no better than that of recruitment companies tied to the UK market.
This looks like an anomaly, especially as business has been on an upswing in recent months – something that could be confirmed at next Thursday’s AGM. Watch this space! All three of these companies have suffered in the recession, but all are very much alive and kicking. And don’t forget – you heard it here first!
• Tom Bulford is a small cap specialist and editor of Red Hot Penny Shares. In the cover story of the new issue of MoneyWeek, out tomorrow, Tom explores the oil sector to see where the finds of the future will be, and reveals the penny-share oil minnows that could become tomorrow’s major players. If you’re not already a subscriber to MoneyWeek, subscribe to MoneyWeek magazine.
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