Aea Technology (LON:AAT) (AAT, 18.25p, £41.75m) Trading from 1 April to 11 August 2010 is in line with management expectations. The climate change and energy consultant reports the pipeline of opportunities in the US remains very strong, expected at c.US$400m projects during the current FY with the principal opportunities coming from the Department of Energy, the Environmental Protection Agency, the Department of Defense and the Department of Transport. The forward order book stands at US$300m. The group is benefitting from the Obama greening of America, but concerns surrounding the level of Federal Government budget deficit is leading to some delays in certain contracts. In the UK, the group is performing broadly in line with management expectation. Management has limited forward order visibility until the outcome of the UK Government’s spending review is known. We believe AEA appears to be reasonably well protected as it is linked to green and efficiency drives that the current Government surely must continue.
Forest Support Services Plc (LON:FSS) (FSS, 8.375p, £1.57m) is to dispose of its only subsidiary, Forest Traffic Signals Ltd to Caswell Support Services Ltd, a newly formed business by Ross Williams, the MD of Forest support Services, for a total cash consideration of £1.97m, equivalent to 10.5p per share. The approval of the disposal will lead to the group de-listing from AIM. Shareholders should anticipate c.9.5p per share to be returned to them post the disposal. We initiated with a BUY and a one year target price of 9p in September 2009 when the share price was 7.5p. This morning’s announcement confirms the group was undervalued.
Vialogy Plc (LON:VIY) (VIY, 5.625p, £38.88m) has secured a master services contract with a global supermajor oil firm - a key milestone for the firm. The project is to provide accurate predictions in porosity variations over an extensive dolomite reef formation in the South-western United States, enabling much improved net pay estimates and increased commercial recovery. The details of the contract will not be disclosed until the completion in the coming months of ViaLogy's QuantumRD analysis of a large onshore prospect. We await the definitive findings. The contract is excellent news; it broadens the business base and adds a credible international firm.
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