By
Joanne Hart
21:09 GMT, 5 May 2012
|
08:55 GMT, 6 May 2012
Waterlogic has pioneered a way to make tap water free from germs. Its unique process works all over the world, even in countries where tap water is normally dangerous to drink.
The company listed on the Alternative Investment Market last July and brokers believe profits will soar over the next three years, making the shares worth a look.
Traditional water coolers – free-standing machines with large bottles of water upended on top of them – are a feature of offices, hospitals, shopping malls and leisure centres.
Fresh idea: Waterlogic is in talks with fridge makers over using its technology
Recently, however, dispensers that
filter water directly from the mains have been developed. These
point-of-use machines have numerous advantages over bottled water
coolers so the market is growing fast and Waterlogic is a recognised
leader in the field.
Customers include Google, the Bank of England and Network Rail. Even
Chancellor George Osborne has one at 11 Downing Street. In Europe and
America there are about two million point-of-use dispensers, about a
quarter of which have been sold by Waterlogic.
The company is best known in the US, Scandinavia, Germany and France but it sells dispensers worldwide.
Companies – and politicians – are attracted to point-of-use dispensers for various reasons.
First,
large firms can save thousands of pounds a year by switching to this
type of unit because there is no need to keep buying replacement
bottles.
Second, they are more environmentally sound because there is no need to
transport the bottles.
They even reduce security risks because unknown workers are not regularly lugging bottles in and out of offices.
Waterlogic prides itself on making top-of-the-range dispensers that are attractive and reliable.
Now
it has created a way of making water germ-free, using ultraviolet light
to kill 99.9999 per cent of micro-organisms.
The process has been approved by the international trade body, the Water
Quality Association, and it is so effective it is even said to make
water from the Ganges drinkable.
Known as Firewall, the UV light treats the water at the point at which
it is dispensed, and silver technology helps to keep the spout
germ-free. Firewall products are already being used in offices. Now
Waterlogic is hoping to roll out the technology to homes.
The
company has designed a selection of domestic products, ranging from
toaster-size machines that sit on kitchen worktops to an extra tap that
fits over the kitchen sink, dispensing cold water, piping hot water and
sparkling water.
The
group has already signed a contract with one leading company to produce
these gadgets on a large scale and it is in talks with several others,
including a number of fridge makers.
Many top fridges have water dispensers that produce filtered water.
But
if filters are not changed regularly, bacteria build up within them, so
they dispense germs. Similarly, water that sits in the fridge in jugs
after filtration becomes more susceptible to microbes than tap water
because the chlorine has been removed.
Waterlogic’s
Firewall system removes all germs.
The technology is expected to be especially popular in the US, where
many drinking water pipes are both extremely old and often laid next to
sewers.
If corrosion
occurs, there can be leakage from one pipe to another and whole areas of
the country are sometimes told they need to boil water before drinking
it while pipes are repaired.
In the first half of last year, this happened more than 500 times, often
lasting for at least a week and sometimes much longer. If homeowners
had Firewall technology installed, they could continue to drink the
water in the knowledge that it would be safe to consume.
Clearly there is huge potential in emerging markets too and Waterlogic
chief executive Jeremy Ben David is talking to potential partners around
the world.
The group reports in dollars because America is its biggest market and
last year it made profits of $6.8million (£4.2million). This year, they
are forecast to double to $13.7million and by 2014, $30.3million is
expected.
Midas verdict: Waterlogic
is at an interesting stage. Its technology has been approved by
international bodies and it is in talks with leading companies
worldwide.
Investors do not yet know the precise nature of the agreements
Waterlogic will reach, but Ben David is a shrewd operator and he owns 25
per cent of the shares, so he is deeply committed to the firm’s
success.
Waterlogic has a unique product and the outlook is bright. The shares
are trading at 1771⁄2p and should rise. Buy
Traded on: Aim
Ticker: WTL
Contact: 01256 400110 or waterlogic.com.