One of the things that intrigues me about Pursuit Dynamics (LON:PDX) is that views on it are so polarised. Look at any of the bulletin boards - or at press comment on the company - and you'll find half the world seems to hate it, while the other half thinks it's the Second Coming. There doesn't seem to be much in the middle. The other thing that intrigues me is that the share price has rocketed over the last couple of weeks, particularly since the February 25th announcement. [1] Definitely time to take a look at this one!
The technology platform certainly looks interesting. The company has a large number of patents, all based on injecting a very high speed gas into fluid to create steam, or a mist of very small droplets. There are two main streams of tech - the first is atomisation, which can create mists for decontamination or fire-fighting purposes, and the second is what's called the reactor technology, which has uses in the food and brewing industry. There are major energy savings from using the technology - for instance Shepherd Neame claims a 47% plus saving in certain parts of its brewing process. Now I know my brewing industry and have brewers as friends, and energy cost is one of the things that gets them very excited - if they can save some gas by fitting a new heat exchanger, or using some new tech, they will. So this is definitely a technology with its uses, and if it works at Shepherd Neame, there's no reason it shouldn't work elsewhere.
What does worry me though is that although Shepherd Neame has ordered a second system, there's not a single documented deal with another brewer. One contract never makes a technology - but getting the second and third deal can be difficult. It also worries me that PDX seems to have a track record of over-promising and under-delivering. It appears to have been slow to move from having some exciting patents, to actually managing to make some revenue out of them. So that leaves some significant execution risk. The company is still burning cash - over the last four years, it's worked its way through quite a lot, and though it claims to have halved the burn…
