Hightex Group (LON:HTIG) specialises in the design, manufacturing and installation of polymer membrane structures such as this image, or the Wimbledon retractable roof (very bottom of article).These polymer membranes are also really quite clever. For instance they have photovoltaic cell technology (PV Flexibles), which can be applied to their membrane structures. Furthermore their membranes can have a ‘Low-E’ coating. This will prevent heat and greenhouse effects in such structures. This was important to the New Bangkok International Airport construction. I seem to recall the company telling me that the airport had to renege on a prior contract at some cost in order to then use Hightex; they did this due to large, but undisclosed, savings on heating.
Other than these efficiencies which may well drive sales of their products there is also the issue of security. Again from a company meeting (almost 2 years ago now) I seem to recall the company saying that they were in high level meetings with figures from US Security as membranes have a huge advantage over glass or Perspex in as much that they do not shatter but merely flap in the event of any explosion.
As you will have gathered I met the company a while back when they were raising money. I did not invest at the time due to the lumpy nature of the profits but more importantly their working capital position at the time. Their financing arrangements would not allow them to take on too much work at any one time. This however has now changed with their agreement with Coface. The financing arrangements that are now in place should greatly enhance their ability to take on more and more large scale high margin projects.
The share price has been a bit depressed in the last few months. This, it would appear, is due to the fact that there is no new news on contracts. In the last interim results investors were primed for two major contract announcements before the end of the year. Sadly that date has passed and the only contract announced was a EUR2 mil contract for an artistic sculpture. Though I take some solace in that projects such as this help enhance the profile and credibility of the company and should hopefully assist in the winning of new contracts.
