MBE Mineral Technologies has bought 10 million shares, increasing its stake from 25.27 per cent to 41.69 per cent.  

The funds will be used to enable Specialist’s new borrowing arrangements with Standard Chartered Bank and MBE, as well as to settle existing derivative instruments.

MBE has bought the shares at 50 pence per share, a 117 per cent premium to today’s trading price of 23 pence.

MBE is the investment arm of McNally Bharat - one of the largest engineering and construction firms in India. 

In April, Specialist said that it was also proposing a further placing to issue four million new company shares in order for it to buy between 20 and 24 per cent of MBE Cologne Engineering GmbH - a wholly-owned subsidiary of MBE. 

The share price was up 7 per cent at 15.57 today at 23 pence.

Specialist Energy (LON:SEGR) said today the weakness in the demand from China and India that hit its first half has started to ease, while nuclear work is also better.

The industrial boiler pump maker post annual trading profits of £1.7 million, down from £2.9 million as a recovery by its aftermarket arm in the second half could not offset a tough year for manufacturing. 

Revenues in 2011 were down 16.7 per cent at £32.1 million (2010: £38.5 million).

Specialist Energy also took write-downs on its property in Luton, where its manufacturing unit is being restructured, receivables and a financial derivative totaling £4.8 million, which meant an overall loss for the year of £3.1 million.

More encouraging was the increase in the 2011 order intake of 5 per cent to £31.6 million (2010: £30.1 million) in spite of the temporary softening in new unit orders from China and India. 

Demand for oil and gas new units and aftermarket services are strengthening including a recovery in nuclear market post-Fukushima, Specialist added.

Shares in the engineer have rallied recently following a proposed £5 million fund raising with MBE - the wholly-owned investment subsidiary of one of India's leading engineering and construction groups.

MBE will acquire shares in the group at 50 pence, a substantial premium to the current market price while the cash will also enable Specialist Energy to set up new borrowing and banking facilities.

John May, Specialist’s chairman, added the proposed refinancing through MBE and closer working relationship with its McNally Bharat arm would enable it to deliver a more effective manufacturing operation and continue growing the aftermarket division.

“We are pleased with the trading levels experienced in the second half which significantly exceeded those achieved in the first six months of the year,” said chief executive of Specialist Energy Ewan Lloyd-Baker.

In addition, the company has made a series of appointments at its main operating subsidiary Hayward Tyler including a group chief operating officer, group supply chain director and group human resources director.

The group said the appointments reflected the continuing investment in the business as it develops a “more reliable supply chain and flexible manufacturing operation to support its international customer-base”.

HT makes boiler circulating pumps (BCP) used in power stations to pump water at high temperature and high pressure.

The traditional buyers of BCPs are the large power utilities and leading boiler manufacturers. However the group has also branched into the oil and nuclear industries.

Specialist Energy will release its full year results for 2011 on April 16.

Investors cheered the report, sending shares in Specialist Energy up seven percent to trade at 30 pence at 7:25. The group currently has a market cap of £10.65 million.

His comments were made as it was revealed order intake at HT rose 19 per cent to £25.4 million in the third quarter.

HT makes boiler circulating pumps used in power stations to pump water at high temperature and high pressure. 

The traditional buyers of BCPs are the large power utilities and leading boiler manufacturers. However the group has also branched into the oil and nuclear industries. 

In its update today, Specialist Energy said orders won by HT’s manufacturing division in the quarter included five offshore units for use in oil and gas exploration. 

The contracts, expected to be shipped next year, are valued at over £2 million, it added.

Business in the aftermarket has been driven by the nuclear and energy markets, with over £7 million of contracts won since the half year, Specialist Energy revealed. 

In the nuclear field, the group secured a major spares contract with Korea Hydro & Nuclear Power, as well as landing deals with TVO Finland and Hatch in the US. 

Specialist Energy chief executive Ewan Lloyd-Baker said: "We are delighted that Hayward Tyler has continued its momentum in the core areas of its business activity. 

“Indeed, despite the difficult market conditions, we are quietly confident that order intake levels for the year will be ahead of 2010."

Shares in SEGR responded positively to the news and were up 2.8 pence, or more than 9 per cent, at 33.8 pence in early deals.

The recent drop in the share price of power station pump manufacturer Specialist Energy Group (LON:SEGR) represents a buying opportunity, according to a research note released today from the firm’s house broker finnCap.

Since SEG announced in mid-September that it was no longer in discussions regarding a potential takeover, as well as interim results that revealed a weak first half, shares in the firm have fallen from around 60 pence each to under 35 pence.

finnCap believes that this makes the firm more attractively valued and will provide investors with an opportunity for appreciation over the next year as it is expected to see a pick-up in activity and the return of “more normal ordering patterns”.

Turnover during the first half was down 20 per cent, mainly due to the manufacturing division experiencing quality control problems on specific cast parts sourced from a supplier. But the broker noted that this problem has now been rectified, while the strength of SEG’s services operation and shift in product mix has boosted group margins.

Also, first half revenues in service activities saw some slight, indirect impact from the Fukushima disaster and “these should be resolved in the second half”.

Meanwhile, finnCap noted that a better second half has been forecast with order intake up 20 per cent to £16.5 million, “which provides the group with some decent future visibility”. The broker also sees a hiatus in Chinese order placement as being temporary, given China’s continuing need for new power generation.

“Following the downgrade on this year’s forecasts (as a result of the issues mentioned) the rating for the current year appears fair,” said finnCap in its note. “However, we look to next year to see the improved levels of trading and a return to normality to provide an attractive rating of 5.8 times. This gives plenty of upside potential to the shares over the next year.”

finnCap estimates that SEG will make sales of £36 million for this year, increasing to £38 million in 2012. Pre-tax profit is expected to come in at £2.2 million, increasing to £3.1 million next year, while earnings per share is estimated at 3.4 pence and 5.9 pence for 2011 and 2012 respectively.

Specialist Energy Group (LON:SEGR) chairman Ewan Lloyd-Baker told investors that the longer term outlook for the international power generation market remains buoyant, despite the current global economic uncertainty.

In this morning’s interim results statement, for the six months ended June 30 2011, the specialist power plant engineering group reviewed a period of contrasting results for the group’s primary operating subsidiary, Hayward Tyler.

The group’s higher margin ‘aftermarket’ division – which deals with spares, field service and repairs – showed a strong performance, while the manufacturing division – which makes new pumps and motors for power plants – suffered weaker trading due to delayed shipments.

Importantly SEGR confirmed that the majority of these delayed units have now been shipped. Accoring to SEGR the delays have highlighted some supply chain problems relating to the sourcing and quality of larger bespoke castings. 

This issue has been addressed with new investments in the UK operational team and additional support for the procurement team. The company has also introduced a supply chain training initiative and a new enterprise resource planning system.

Overall first half revenues were down at £14.4 million, compared with £18.1 million in the comparative period of last year, mainly because of the problems in the manufacturing business.

SEGR reported an operating profit of £0.5 million (H1 2010: £1.1 million) and an adjusted pre tax profit of £0.2 million (H1 2010: £1 million). Earnings (EBITDA) were down from £1.4 million in the first half of last year to £0.8 million.

There were also positives. Order intake increase by 20 per cent to £16.5 million, compared with £13.8 million in the first half of last year. 

Breaking it down into its component parts the £16.5 million order intake, which puts the order book at £21.5 million at June 30 2011, was split with £6.7 million in manufacturing and £14.8 million in aftermarket. This order book provides delivery coverage into the second quarter of 2012, SEGR said.

Thanks to the strength of the aftermarket division gross profit margin increased to 34.1 per cent compared with 32.3 per cent last year. 

Net debt reduced to £9.3 million from £10.5 million in the first half of last year, but this is actually up from the £6.7 million reported at the 2010 year end, due to a temporary increase in working capital.

"We are pleased that order intake levels in Hayward Tyler have continued to grow in line with previously stated expectations.  It is also encouraging to see a further improvement in gross margin levels,” said chairman Ewan Lloyd-Baker.

“However, it is disappointing that delays in the manufacturing division have impacted our half year numbers. 

“We nevertheless expect to see a substantial improvement in the operational performance of the business in the second half though inevitably the timing of certain contracts completing will ultimately determine the scale of our full year results.”  

Highlighting a more positive outlook for that current period, SEGR said: “With the majority of the delayed units now shipped the second half outlook for the manufacturing division is more encouraging with margins expected to improve albeit not to the levels achieved last year.”

In the short term there are still question marks over demand, although SEGR said that the ‘softening in new unit demand’ experienced in China and India is expected to be only temporary in nature and the longer term outlook is positive for new build power plants in both countries.  

“Likewise, given the events earlier in the year (the Fukushima disaster) it is encouraging to see activity levels in nuclear new-build increasing and this sector remains a critical part of the future energy plans of China, India, the UK and USA (all markets in which Hayward Tyler has a strong presence).”

“The board expects to see a substantial improvement in the operational performance of the business in the second half driven by the higher margin aftermarket business,” SEGR added. 

“Management is currently focused on restoring the manufacturing division to profitability.”

In a separate statement today SEGR confirmed that it is no longer in talks, with an un-named third party, over a potential sale of the company.

At 9:00 the group’s shares were down 10.5 pence, about 16 per cent, trading at 52.5 pence a share.

“(The) interims show a decent improvement in service profits while manufacturing was disappointing, with slippage in some contract deliveries out of the first half into the second,” finnCap analyst David Buxton said in a note to clients. 

“There has also been a boost from the shift in the product mix towards the higher gross margins of the services operation. 

“India and China should both resume orders as their inexorable growth demands significant increases in power generation equipment,” he added.

Specialist Energy Group (LON:SEGR), which makes pumps for the energy industry, said that momentum within its core Hayward Tyler business had continued into 2011 following increased interest in the company’s products during the later part of 2010.

Meanwhile, the board confirmed that the bid discussions it revealed in early May are continuing. 

During the first four months of the year, intake levels at both Hayward Tyler’s manufacturing and aftermarket services divisions increased by more than one third compared with the same period last year. Currently, the firm’s forward order book stands at £22.4 million, after it received orders amounting to more than £12.5 million in the four months to 30 April.

SEG said that in Hayward Tyler’s key power generation market activities continue to be heavily focused on China and India, with a number of units shipped to these regions during the year so far.

Meanwhile, the firm successfully completed a shipment to one of the US’s largest producers and transporters of nuclear energy; this US$3.6 million order for aftermarket spares was shipped during the first quarter. To date, Hayward Tyler has installed equipment in almost 60 per cent of nuclear power plants in North America and in more than 140 nuclear power installations globally.

Hayward Tyler continues to make good progress in the European offshore oil & gas market. The firm recently completed and shipped a 2.7 megawatt subsea motor to the GE Oil & Gas Universal Subsea Boosting research project. The motor will be used at the USB programme at GE’s Nuove Pignone facility in Bari, Italy.

“We are delighted to see the sales pipeline at the end of last year now being converted into new order wins,” said Ewan Lloyd-Baker, SEG’s chief executive officer. “Hayward Tyler has established itself as a global market leading brand in its sector, the group now having revenues healthily split across the US, Europe, India and the Far East.”

On 3 May SEG announced that it was in discussions concerning a takeover of the group. On that day its shares put on 15 per cent ending the session at 83 pence each.

FinnCap this morning raised its valuation for  Specialist Energy Group (LON:SEGR) by 45 percent after the group revealed its Hayward Tyler subsidiary landed a bumper £5.9 million-worth of new orders in January. 

The City broker, which is also the company’s nominated adviser, hiked its price target to 94 pence a share from 65 pence. 

At 11.15 am, the stock was trading at 82 pence, up 4 pence or 5 percent. In the last six months Specialist Energy has more than doubled in value.

“We remain very positive on the group’s growth prospects as well as its shares,” said FinnCap analyst David Buxton.

“The contract announcement gives greater confidence to our forecasts and indicates that order book momentum is improving.”

Specialist Energy’s Hayward Tyler makes boiler circulating pumps (BCPs), and is one of Britain’s oldest engineering firms. 

It is also a very rare commodity - an export success story. It has more than 60 percent of the installed market for BCPs, which are fitted in power stations all over the world and are used to drive water around boiler plants.

Following up a strong December, in which it brought in signed deals worth £5 million, Hayward Tyler has done even better in January. 

It has won a number of contracts in India, China, Europe and the United States.

“We are pleased to report that the strong momentum in our core markets in Asia, Europe and the US highlighted towards the end of 2010 is continuing into 2011,” chief executive Ewan Lloyd-Baker said. 

“In particular, we see China and India continuing to offer significant growth opportunities for the group.”

It won a contract with Larsen and Toubro, a large Indian construction group, to deliver three supercritical BCP units for the Koradi project in Nagpur – where L&T is building a 1,980 megawatt thermal power plant. 

Hayward Tyler has won a new order from the Dongfang Boiler Group, one of the largest boiler suppliers in China. 

It will sell the firm two more supercritical BCPs, which will be used at the Hanchuan power plant in Hubei province.

It also won two major oil and gas projects with a Norwegian offshore equipment maker, Bjorge Eureka. 

The £1.5 million deal is for five Sea Water Lift Pump and Fire Water Pump motor units for use in the Gudrun and Ekofisk North Sea projects.

In the US it secured a contract to overhaul a BCP at the Conesville power station in Ohio - Hayward Tyler has installed equipment in almost 70 percent of North America’s nuclear power plants.

FinnCap expects sales to be flat at £40.7 million in 2011, rising to £42.9 million in 2012, giving EBITDA of £4.6 million and £5.4 million respectively.

“We maintain our existing forecasts,” said FinnCap’s Buxton in a note to clients.

“With a strong start to the year, we are confident 2011 numbers will achieved. Indeed, the group is also seeing momentum starting to build for the 2012 order book. 

“It also confirms that the money raised in the placing in December is now being put to good use as the increased work flow feeds through to increased working capital. 

“The group is delivering on the planned strategy and targets.” 

Hayward Tyler, one of Britain’s oldest engineering firms, makes boiler circulating pumps (BCPs). It is also a very rare commodity - an export success story. It has more than 60 percent of the installed market for BCPs, which are fitted in power stations all over the world and are used to drive water around boiler plants.

Following up a strong December, in which it brought in deals worth £5 million, Hayward Tyler has done even better in January. It has won a number of contracts in India, China, Europe and the United States.

“We are pleased to report that the strong momentum in our core markets in Asia, Europe and the US highlighted towards the end of 2010 is continuing into 2011,” chief executive Ewan Lloyd-Baker said. 

“In particular, we see China and India continuing to offer significant growth opportunities for the group.”

It won a contract with Larsen and Toubro (L&T), a large Indian construction group, to deliver three supercritical BCP units for the Koradi project in Nagpur – where L&T is building a 1,980 megawatt thermal power plant. 

Hayward Tyler has won a new order from the Dongfang Boiler Group, one of the largest boiler suppliers in China. The company has had contracts with Dongfang before and now it will sell the Chinese firm two more supercritical BCPs. The pumps will be used at the Hanchuan power plant in China’s Hubei province.

It also won two major oil and gas projects with a Norwegian offshore equipment maker, Bjorge Eureka AS. The £1.5 million deal is for five Sea Water Lift Pump (SWLP) and Fire Water Pump (FWP) motor units for use in the Gudrun and Ekofisk North Sea projects.

In the US it secured a contract to overhaul a BCP at the Conesville power station in Ohio - Hayward Tyler has installed equipment in almost 70 percent of North America’s nuclear power plants.

MBE is a large Indian turnkey engineering firm. It initially took a 10 percent stake in September 2010. 

At that time chief executive Ewan Lloyd-Baker told Proactive Investors that SEGR would maintain discussion with the group because they see MBE as potential strategic partner and investor. 

Since then MBE has continued to build a stake in the company.

In the latest transaction the Kolkata headquartered engineering firm bought almost 900,000 shares on 31 January, via its wholly owned subsidiary MBE Mineral Technologies. It now owns around 5.8 million SEGR shares, which represents 16.33 percent of the company.

The niche engineering and manufacturing group said that the order was for the delivery of two new 520kW glandless motor pumps for a conventional power station in Shentou, Shanxi Province, China.

The Hayward Tyler pumps will be used in two 600MW Advanced Supercritical Once-Through boilers which achieve a significant reduction in CO2 emissions compared to traditional coal powered stations, said the company.

The company now has over 500 installed pumps in China and the Far East which are serviced via its local service facility in Kunshan, near Shanghai.

Meanwhile, Specialist Energy also told investors that it had successfully completed a £2.5m contract in the USA - announced on 8 July 2010.

This was for the delivery of synthetic gasification cooler pumps for use in one of the largest Syngas projects in the world.

The contract was a first in the area of synthetic gasification for Hayward Tyler and signifies an important step for Hayward Tyler as it looks to position itself at the forefront of upgrading clean coal power plants through the use of its technology within Integrated Gasification Combined Cycle Power Plants ("IGCC").

Using the IGCC technology, coal is converted into synthetic gas, which is then processed to remove sulphur, mercury, ash and carbon dioxide.

The gas then goes to a traditional combined cycle power plant using a combustion and steam turbine to efficiently produce electricity.

SEG chief executive Ewan Lloyd-Baker said: "As an export-led business heavily focused on the energy sector, it is critical that our technology is at the forefront of the clean energy drive - whether it be improving the efficiency of traditional coal based energy production or being a part of new initiatives.

"We are delighted that our activities in the US and the Far East reflect both of these aspects."