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SPI Lasers (SPIL:AIM) – Finals PTP: -£12.7m (-£11.3m) Divi: n/a (n/a)

The maker of optical fibre lasers concluded a tough 2007 in an upbeat mood, after two profit warnings last year saw the shares take a battering, falling from the 253p high in July last year to the current 30p level. Investors’ faith collapsed when SPI Lasers said not only the weak dollar, but also supply issues and poor pricing for its products would hit profits.

A net £10.5 million was raised last August to get the company back on its feet, and the full-year numbers released last week suggest the cash was used well. CEO David Parker says that first, the supply issues have been resolved, and most importantly the products have been re-engineered completely, in a way that makes them more efficient and easier to market as costs have been cut significantly. Parker say the new products ‘have generated better performance and were improved in a way that achieved enormous benefits in the cost of building the laser.’

In terms of numbers, full-year revenue nearly doubled to £13.05 million, from £7.1 million in 2006, and the pre-tax loss increased by about 12% to £12.7 million. The company has won more than 50 new accounts in the last six months based on the new product platforms, and has kept registering strong demand in the first months of 2008. Cash balance at the end of 2007 was £11.3 million.

Number crunchers at Cantor reckon in 2008 the SPI Lasers will turn around £20 million, or 53% more than last year, and that it should become profitable in the last quarter of this year, two objectives Parker says he is comfortable with.

Shares says: A terrible 2007 seems over, the next trading update should provide more evidence.

by: Carlo Svaluto