“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.

Shares in engineering firm Weir Group (LON:WEIR) were down 6.7 per cent at 1,800 pence each in mid-morning trading today despite the firm reporting that conditions across all its markets “remained strong” throughout its third quarter.

Weir – which supplies equipment to the minerals, oil and gas and power sectors – also said that revenue strengthened further during Q3 2011, ahead of both the first half run rate and prior-year period, thanks to it building a strong order book during the first half. Reported orders increased 27 per cent during the quarter, which meant that order input for the first 39 weeks of the year was up by 37 per cent.

These orders broke down into a 48-per cent increase for original equipment orders during the year to date, with aftermarket orders increasing by 28 per cent.

Order input from the minerals market segment was greater by 25 per cent, and the firm said that it continues to see a good pipeline of future opportunities with no sign of macroeconomic uncertainty affecting customer production levels or new project developments.

In oil and gas order input increased by 24 per cent. Here, Weir said that downstream market conditions “remain challenging” while the Middle East service markets continue to be positive.

In the power and industrial market segment, order input was greater by 23 per cent. Weir said that overall market conditions in the segment remain mixed with continuing delays in nuclear projects and largely weak general industrial markets.

Meanwhile, Weir said that its net debt level on September 30 was greater than that reported for July 1, with further investment in working capital anticipated during the fourth quarter.

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.

Engineering firm Charter International (LON:CHTR) said this morning that it is now talking to rival engineering group Melrose (LON:MRO) about a takeover after the latter company increased its proposed offer for Charter by 18 pence per share. The firm has also opened its books to Melrose so that it can complete due diligence connected to the takeover. 

In July Melrose’s previous offer of 840 pence per share was rejected by Charter’s management, but the latest offer will pay 850 pence per share to Charter’s shareholders as well as allowing them to retain the interim dividend of eight pence per share that was declared at the end of July.

In a statement this morning, Melrose’s directors said: “On the basis of the increased proposal, and in light of the heightened recent economic uncertainty and market volatility, the Company has commenced discussions with Melrose about its proposal and, in the meantime, has agreed to grant Melrose access to company information to allow Melrose to complete its confirmatory due diligence.”

This morning shares in Charter were up more than five per cent at 802 pence each, while Melrose’s share price was down six per cent at 295 pence.

Fenner (LON:FENR), the conveyor belt manufacturer, announced its wholly owned subsidiary Hallite Seals Australia is purchasing 100 per cent of the share capital of Transeals, a privately owned company based in Perth, Australia.

Transeals makes and distributes seals used in hydraulic equipment and currently serves the western parts of Australia.  The unaudited value of the gross assets acquired by Hallite is A$5.586million as at 30 June 2011.  The transaction is expected to complete in early September 2011.

Fenner says the strategic acquisition allows Hallite, which is mainly east coast based, to develop its aftermarket presence in the buoyant mining and oil and gas markets of Western Australia.

“With the capability for same day or early next day delivery, the combination of Hallite and Transeals will offer unparalleled availability of seals throughout Australia,” it says.

Nicholas Hobson, chief executive of Fenner, adds: "This is an exciting development for our Australian seals business.  It improves our coverage, expands our product offering and strengthens Hallite's position as the leading supplier of seals to the Australian hydraulics market."

Fenner is a world leader in the field of reinforced polymer engineering.  Its products include conveyor belting for the mining and power generation markets; sealing products for mining, hydraulics and energy industries; and technical fabrics and polymer products for the medical device industry.

Last month Citigroup reiterated its "buy" rating for Fenner after the group released its interim management statement for the period since 27 April this year.

Citi said at the time that the statement highlighted that the group retains strong trading momentum in both its conveyor belt (70 percent sales) and advanced engineering products (AEP, 30 percent sales) divisions.

Citi rated the stock a "buy"/high risk, with a 478 pence target. This morning the shares were up 5.45 pence to 316.05 pence. 

Citigroup believes the pull back in the shares of engineering group Fenner (LON:FENR) represents a buying opportunity.

Shares in the firm tumbled as low as 301.4 pence each by yesterday’s close, having traded for more than 400 pence in late July. At lunchtime today, they were changing hands for 319 pence each.

According to the investment bank, now is “a good opportunity for investors to revisit the stock”.

Citigroup explained: “Given macro turmoil, we recognise that many stocks have fallen sharply. However, we think the downwards move in Fenner stands out as particularly unwarranted in the mid-cap space. In Q2, we spoke to many investors who thought they had missed an opportunity in the stock.”

The bank said the shares currently trade at around 9.7 times 2012 estimated earnings.

In a mid-July trading update, Fenner said that trading across the group during its third quarter had been strong, with continuing growth in both its Conveyor Belting and Advanced Engineered Products divisions. During this period revenue increased significantly over Q3 2010, said the firm.

 In the Conveyor Belting division demand patterns from the coal sector had been robust during Q3 2011, with end users placing orders to secure forward supplies. Meanwhile, a continued recovery was evident in industrial markets.

The Advanced Engineered Products market had made “excellent progress”. Demand for the firm’s niche critical application product offerings had been “extremely strong”, while Fenner’s seals business continued to experience high demand from the oil & gas and general hydraulic sectors.