Corac announces losses for 2011 but remains optimistic

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Compressor and power electronics company Corac has posted losses for 2011 but remains optimistic about the future.

The Brunel University spin-out company posted its annual results this week, which revealed revenues of £320,000 for 2011, down from £660,000 in the previous year. This has been attributed in part to acquisitions made during the year and a move from its Brunel facility to a new £1.6m Technology Centre in Slough.

While Corac ended the year with £15.33m in cash, down from £21.76m a year earlier, Mark Crawford, Corac’s chief financial officer, told The Engineer that the figures in the report have been affected by the company’s acquisition of Wellman Hunt Graham and Wellman Defence for £10.75m, which are expected to be accretive to earnings.

‘The acquisition of Wellman Defence brings long-term contract revenues of around £10m a year. The heat exchange business brings in a similar number of revenues, but with shorter-term contracts and good recurring customers,’ said Crawford.

Over the past 18 months, Corac secured £1.5m in new partner income for research and development (R&D) projects that are expected to mature in 2012, including the application of Corac’s new In-Pipe Gas Compressor that has been developed with 14 patented pieces of technology and in partnership with Saudi Aramco.

‘We’ve continued to invest in R&D,’ said Crawford. ‘We get some funding from partners but this can only be recognised on completion of a milestone.’

Shares surged 10.5 per cent on 17 April, valuing the AIM-listed group at £33.1m.

In the oil and gas sector, Corac’s compressor technology can be used at the bottom of wells to generate pressures that pump otherwise unattainable gas to the surface, thereby boosting overall gas production. The core technology is also being used in other markets where a clean air supply is needed.