PORVAIR

PORVAIR is a small engineering firm based in King’s Lynn, Norfolk, whose products are used in every commercial aeroplane around the world, as well as in metal processors, nuclear decommissioning plants and a wide range of cuttingedge laboratories.

The company makes sophisticated filters, which play a crucial role in numerous industrial, commercial and scientific markets. Turnover has doubled since 2012 and should do so again over the next six or seven years.

The shares are 455p and should deliver strong growth as the business expands.

Filters are relatively inexpensive but they perform a vital job. In aircraft, for example, Porvair’s filters ensure that fuel is totally pure before it reaches the engine. These bits of kit clearly need to be of exceptionally high quality, but they must also be as small and light as possible, and cost-effective.

In industry, all molten metal is filtered before it is fashioned into solid products and Porvair filters half the world’s aluminium, used in everything from Coca-Cola cans to car wheels to window frames.

Laboratory samples have to be filtered too, before they are tested, and Porvair is particularly involved in environmental work, ensuring that water is clean to drink, from the US to China.

The company’s filters also make sure that fissile material does not leak into the environment when nuclear sites are being cleaned up. And its equipment is used in gasification plants, huge sites that convert coal to gas.

Porvair is run by Ben Stocks, who will have been at the helm for 20 years next month – an unusual achievement on the London market.

His approach is straightforward – look for markets that are growing, work closely with customers to understand and anticipate their needs, then ensure Porvair’s products are able to satisfy them.

The firm is small compared to its rivals but punches above its weight by listening to customers, investing significantly in research and devel- opment and employing smart engineers to create excellent new kit. A third of its designs, for example, have been developed over the past three to five years, as it constantly refines and improves products. Contracts tend to be long-term, as filters need regular maintenance, and Porvair has further protection against economic volatility because it operates around the world.

Porvair’s financial year runs to November 30 and brokers expect turnover to rise by 12 per cent to £122million, with profits up 9 per cent to £11 million and the dividend up 5 per cent to 4.1p.

The current year has begun well and further growth is expected in 2018 and beyond. The group also aims to make a few small acquisitions a year to boost overall growth. Midas verdict: Porvair provides an essential service to large and growThis ing customers worldwide. Having doubled turnover in the past five years, Stocks and his team are determined to carry on in the same vein and the shares should respond. At 455p, they are a strong buy. Traded on: Main Market Ticker: PRV Contact: porvair.com or 01553 765500