18th Oct 2007 07:01
Pursuit Dynamics PLC18 October 2007 18 October 2007 PURSUIT DYNAMICS PLC ('Pursuit Dynamics' or 'the Company') Trading Update Pursuit Dynamics PLC (AIM: PDX), the developer and exploiter of the PDX platformtechnology, is pleased to announce that it has continued to make good progressin the commercialisation of its wholly owned PDX(R) technology during the periodended 30 September 2007. The Directors believe that the advances made by the Company and its partnersover the second half of the period have positioned the Company to benefit fromsubstantial revenue streams from its two major markets of bio ethanol and firesuppression. Prior to the release of the full year preliminary results, the Directors wish toupdate shareholders on all aspects of the business. Bio ethanol Pursuit Dynamics has been actively engaged in research into enhancing bio fuelyields since May 2006 and has been undertaking physical testing and analysissince December 2006. The United States Department of Agriculture anticipatesproduction of ethanol to reach 9.3 billion gallons in 2008 and we anticipatepeak production of 15 billion gallons of conventionally produced (starch based)ethanol in 2011. Recent developments in the ethanol industry have seen sharpincreases in feedstock prices and declining ethanol prices, both of which aremajor drivers for the adoption of a yield-enhancing system such as ours. In June we announced the completion of Phase 1 of our bio ethanol trials andreported that initial results had been very encouraging, with the PDX reactordemonstrating a significant improvement over conventional production methods. We have now completed Phase 2 of our bio ethanol trials programme, which hasfocussed on the production of ethanol from starch (Generation 1), and hascontinued to explore the impact of the PDX technology on cellulosic ethanolproduction (Generation 2). Our Phase 2 trials have demonstrated that a modified PDX reactor system isrepeatedly capable of producing the equivalent of 3.3 gallons of fuel ethanolper bushel of corn. This represents an increase of around 17% over the bestcurrent ethanol plant yields and is more than double the overall yieldimprovement we reported on 11 June 2007 at the end of our Phase 1 trials. Webelieve these results can be achieved in a production environment with noadditional costs over those seen in conventional ethanol production. Provingthis will be the key element of Phase 3 of these trials. We are currently finalising agreements for the first full scale productionsystem to be installed by a US ethanol producer. We are also in final contractnegotiations to undertake further exploratory trials at a leading ethanolresearch institution in the US. These trials, scheduled to start in earlyDecember 2007, are designed to see whether we can further increase the yieldimprovements that we are seeing in-house and to aid the design process for thecommercial system. Analysis of the results of these trials should be availableby March, 2008. In addition, results from trials on Generation 2 production (cellulosic materialto ethanol) continue to show greater than 80% conversion of the cellulosiccontent of Wet and Dry Distillers Grain into fermentable sugars from anon-optimised PDX system. It is still too early to determine whether thisprocess will result in an economically viable offering but the results we haveachieved to date are very encouraging. In November, 2007, we will move forwardsto trials, which will target a range of cellulosic materials with a view tostarting the technology optimisation process. We look forward to reporting theresults of these trials as results come to hand. The results of Phase 2 of our trials are, we believe, of enormous significanceto the bio fuels industry. If successfully translated into industrial realityover the next year, the PDX technology will have an immediate and positiveimpact on the economics of conventional starch to ethanol production. The progress made in applying the PDX reactor to the production of bio ethanolhas been very swift. We began the physical aspects of our Research andDevelopment programme only ten months ago and are now on the verge of commencingfull scale production trials with a commercial partner in the United States. Inno small part, the rapid progress over the past six months was made possible bythe raising of £7.6m in February, 2007. As a result of this fund raising, wehave been able to accelerate the programme to a point where we have a high levelof confidence that our PDX technology will consistently return higher yields inconventional corn to ethanol processes and will successfully translate tocommercial reality during 2008. Fire Suppression Tyco Fire and Building Products ("TFBP"), the global licensee for our FireMist(R) fire suppression technology recently updated Pursuit Dynamics on theprogress of commercialisation. TFBP has approved the following statement: "Based on joint research and development efforts, a system using componentsincorporating the PDX FireMist(R) technology recently successfully completed allrequired testing with Factory Mutual, an independent, internationally recognizedthird-party testing facility, and TFBP has further advised it is awaiting theformal approval documentation. TFBP has indicated it plans to begin Beta Siteinstallations and evaluations of the initial system in early Fall 2007. TFBPalso expects to continue its development efforts to expand the initial systemconfiguration to include additional applications. TFBP is expected to marketproducts and systems based on the PDX FireMist(R) technology globally under itsown brands." Carmine Schiavone, Vice President of Marketing and Sales for TFBP said: "In viewof the successful completion of required testing of the PDX FireMist(R)technology, we plan to expand our marketing, commercialization and developmentefforts. The addition of Pursuit Dynamics' cutting-edge technology furtherenhances our position as the worldwide leader in fire suppression systems, andwe are pleased to be partnered with a company that has their vision andexpertise." Pursuit Dynamics will release updated information on the continued developmentof TBFP's product line incorporating the PDX FireMist(R) fire suppressiontechnology as it becomes available. It is now just under two years since Pursuit Dynamics licensed the FireMist(R)technology to Tyco and, whilst various approvals have taken longer thanoriginally anticipated, we are delighted that TFBP is now on the verge oflaunching the product and has committed to expanding the product range andapplications of the technology. FireMist(R) represents a revolution in the way that fires will be controlled inthe future and we look forward to receiving the first license revenues from Tycoin the near future. Decontamination We are pleased to announce that we have been informed that one of the primecontractors with whom we have lodged bids over the past six months has beensuccessful in their bid for a US Government sponsored programme. We expect toconclude contract negotiations shortly. During the first six months of the financial year, we lodged, as asubcontractor, a number of bids with major defence contractors to addressvarious government programmes. To help reduce our dependence on the vagaries of timing by government agencies,we have adjusted our business model in relation to our defence-based activitiesand are now actively engaging with primary defence contractors on a strategic,rather than a subcontractor, basis. We have now done enough internal and external trialling to believe that theproving phase of our Basilisk technology is now largely over and, as a result,we have started the development of a man-portable decontamination prototype andexpect to have this available for customer demonstrations during 2008. Pursuit Processing Equipment (PPE) We expect to report revenues for the full year of £3 million: double thosereported in 2006. Despite this robust performance, the sales function of PPEresponsible for the generation of orders for the PDX business has not performedas well as we expected. In order to rectify this, we have made changes to thesales organisation and are now confident that we have in place an approach thatwill maximise the opportunities available to us in the Food and Brewing sectorsgoing forward. In addition to being responsible for the sales, distribution and manufacture ofour Food and Brewing products, PPE plays an important role in providing theCompany with knowledge and integration skills which have been essential inhelping us progress the commercialisation of the PDX technology, especially inour current bio fuels programme. In order to assist with the future development of PPE, the initial focus of bothour recently recruited Business Development Director and our new CEO for our USSubsidiary, Pursuit Dynamics Inc. will be on the enhancement of the distributionof PPE products. Outlook As is the nature of developing innovative technologies, different applicationsdevelop at different speeds. The speed of their development is very muchdependent upon a number of factors including the regulatory environment, marketfragmentation and also wider macro economic issues. We are very encouraged by our progress in bio ethanol and believe that, if wemaintain our current rate of progress, we will see the beginnings of asignificant revenue stream in the 2008 financial year. Our global licensee TFBP continues to make good progress towards releasing afire suppression system including our FireMist(R) technology and we anticipatethe start of a royalty stream in the 2008 financial year. Our decontamination business is still at an early stage and we would expect amodest revenue stream combined with continued validation of our Basilisktechnology during financial year 2008. We expect to see our food and brewing business continue to grow its revenues in2008 however, the rate of growth may be slower than previously anticipated inthe market. For Further Information, please contact: Pursuit DynamicsJohn Heathcote, Chief Executive Tel: +44 (0)1480 422050 Redleaf CommunicationsEmma Kane / Paul Dulieu / Richard Girling Tel: +44 (0) 20 7822 0200 Cenkos Securities plcIan Soanes Tel: +44 (0)20 7397 8924 Notes to Editors - Pursuit Dynamics PLC (AIM: PDX) owns and commercialises the PDX fluid processing reactor whose benefits include significant reductions in energy usage, process acceleration and result enhancement for industries such as Food & Drink, Brewing, Fire Suppression, Decontamination and bio ethanol production. - Pursuit Dynamics is headquartered in Huntingdon, UK and has an office in Norwalk, Connecticut, USA. Pursuit Processing Equipment Limited, the processing equipment division of Pursuit Dynamics, operates from its own facility in Brooklands, Surrey, UK. - Further information is available at the Company's website: www.pursuitdynamics.com - Publication quality photographs are available from Redleaf Communications. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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