SHARE PUNT OF THE WEEK

WHAT IS IT?

Set up in 2004, Sabien Technology Group makes energy-saving devices for commercial boilers.

Its patented products are the M1G, which is a technology used to control hot water heaters, and the M2G, which prevents dry cycling in industrial boilers.

The business listed on AIM in 2006.

WHAT’S THE LATEST?

Shares halved this week after the firm warned full-year performance would be significantly below expectation. It made a pre-tax loss of £826,000 in the six months to December 31 – lower than the £983,000 loss posted in the same period the previous year.

WHO BACKS IT?

The largest shareholder is chief executive Alan O’Brien, who holds an 18.6pc stake. Chairman Bruce Gordon holds a 15.3pc stake. Institutional investors include Amati Global Investors and Rathbone Investment Management.

WHY YOU SHOULD INVEST

Energy efficiency and technology are hot areas and Sabien boasts two patented products.

The firm has a sales pipeline of £9.7m and saw half-year overseas sales more than double to £166,000. It tries to win customers by offering free pilots of its products.

AND WHY YOU SHOULDN’T

A major issue with its business model is how long it takes to convert those free pilots into sales – typically between six and 24 months.

That is dragging on performance, and with net cash reserves of just £240,000 (down from £868,000 six months ago) Sabien warned it would have to raise more cash from investors to meet its liabilities. And there is always the fear that whatever its next big idea is may not be as successful as hoped.