Amiad Filtration Systems (LON:AFS) was one of the AIM market’s steepest fallers this morning, with 9.6% sliced off the price of its shares on news that the Israeli water filter specialist is set to miss first-half revenue and profit targets. The company blamed its problems on the general economic downturn, which it said had particularly impacted its irrigation segment and work on industrial projects in the US.

In April, Amiad warned that trading in the early part of 2010 had been impacted negatively by malaise in the wider economy and today said that trend had continued. It now expects to report revenues for the first half of 2010 of approximately $37m – which includes a $6m contribution from the recently acquired Arkal Filtration Systems Cooperative Agricultural Society Ltd. That compares with $36.8m reported for the first half of 2009.

On a brighter note, the company said it expected that trading in the second half of 2010 would improve. Meanwhile, the Arkal acquisition is expected to further strengthen total revenue. It is anticipated that results for the six months to June 30, 2010 will be announced in early September 2010, when the company will provide an update on its trading for the full year.

Founded in 1962, Amiad has become an established player in the market for water filtration technology and operates a 10-acre headquarters complex in Israel that includes research and development, manufacturing, warehousing and training facilities. In the year to December 2009 revenues dipped by 5.7% to $69.1m but pre-tax profits were up by 30% to $8.7m. The acquisition of Arkal, which completed at the end of April, cost Amiad $10m plus shares constituting 14.5% of its share capital. Arkal is a leading supplier of water filtration solutions, with particular presence in the irrigation market. Amiad said the addition of Arkal's product range, and sales and marketing infrastructure would considerably enhance its own offering in the irrigation market, as well as in the industrial and municipal markets.

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