UK industry once led the world and our stock exchange dominated global financial markets.
The mood has been rather less triumphant in recent years. Manufacturing accounts for less than 10 per cent of our economy, UK shares have been widely shunned and the junior Aim market has suffered more than most.
All of which makes the flotation of specialist engineering firm Amcomri particularly exciting.
Founded by seasoned business experts Paul McGowan and Hugh Whitcomb, Amcomri joined Aim just before Christmas at 55p a share. The stock has risen to 59p and should continue to increase in value in 2025 and beyond.
Amcomri buys engineering and manufacturing businesses whose owners are nearing retirement. Thousands of these enterprises are dotted across the country, run by dedicated entrepreneurs who have spent years building up their firms and want to make sure they continue to thrive.
Amcomri seeks out these companies and helps them transition to new ownership as their founders move on to life beyond business.
Flying: Joanne Hart says the flotation of specialist engineering firm Amcomri is particularly exciting
Results so far show the merits of this strategy. McGowan and Whitcomb began working in this area in 2016, founded Amcomri in 2020 and now own 12 flourishing businesses.
Activities are wide-ranging but all are highly specialised and benefit from long-term customer relationships and contracts with companies including defence giant BAE Systems, nuclear energy group EDF Energy and the London Underground.
Oldham-based TP Matrix, for example, replaces ageing electronic parts on trains, such as components that help doors open and close when passengers press specific buttons.
Under rail regulation, this kit needs to be updated regularly and TP Matrix helps to make that happen.
Under Amcomri’s tutelage, the firm is growing, winning business from train operators and their suppliers and helping to make rolling stock last longer.
In Swansea, Amcomri-owned IVS works with Dragon LNG, which imports liquefied natural gas from all over the world.
Responsible for a significant proportion of UK energy demand, this liquefied gas is pumped from ships into specialised storage tanks so that it can be converted into use for homes and businesses.
The process is complex and safety is critical. IVS services the valves that ensure tanks are secure and standards are maintained. Again, the business has grown considerably under Amcomri’s stewardship.
In a similar vein, Spiral Weld, overhauls and repairs 10-ton cooling water valves for nuclear power plants, while Kestrel Valve operates in the renewable energy space.
On the manufacturing side, Claro Precision Engineering makes hinges for Airbus planes and Premier Limpet makes high-quality printed tape used in parcels and packaging.
The portfolio is broad but there is a focus on improving sales and profits by gaining new customers, selling more to existing clients and streamlining processes so that firms become more efficient.
Recent figures are encouraging. In 2021, group revenues were around £27.3 million. By 2023, turnover had soared to £47 million, with underlying profits more than doubling from £2.7 million to £5.8 million.
More of the same is expected from the year just ended, the next 12 months and thereafter.
McGowan and Whitcomb run a small team but it includes industrial, financial and management specialists, whose combined experience and expertise help businesses to grow.
The group intends to acquire two or three new firms a year and the field is vast, allowing Amcomri to be highly selective. Initially, most introductions came from regional accountants.
Today, McGowan and Whitcomb are increasingly recommended by owners who have witnessed first-hand what the pair can do.
The group benefits too from a subtle shift in UK industry, as large UK-based companies look for local suppliers whom they can trust to deliver top-quality goods, work at speed and provide regular, reliable services.
Covid-19 and the Ukraine war highlighted the risks associated with over-reliance on overseas suppliers. That has fuelled growing enthusiasm for home-grown enterprises, especially in sensitive sectors such as energy and defence.
Midas verdict: Amcomri has had a strong start as a public company and deserves to continue in that vein. The UK has a rich engineering history and should have a robust future too. Amcomri is helping to make that happen and deliver rewards to shareholders along the way. At 59p, the shares are a buy.
Traded on: Aim Ticker: AMCO Contact: amcomrigroup.com
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