Gamble of the week: Grow your profits

This small-cap is growing profits with its fertiliser-making machinery. A buy for the brave, says Paul Hill.

For Carr's Milling Industries, fertiliser doesn't just help crops grow it also grows profits. In July, the firm pocketed £22.1m after selling its cyclical fertiliser mixing business to Origin Enterprises. In doing so it simplified the group's business and flipped last year's £15.5m of debt into a cash balance of £4.6m in August.

The proceeds will be used to accelerate growth in its three other divisions. A €4m new factory at Markdorf in Germany, for example, will make niche robots that operate in areas of nuclear plants that are too hazardous for humans. The engineering division (18% of profits) is experiencing buoyant demand from France, Germany, Japan, Korea and China. Indeed, the order book closed in October at €38m a 120% rise in the year to October 2011. That's thanks in part to the €6.5m contract made in June for a nuclear decommissioning project in Russia. Overall, the order backlog will keep the firm busy for the next two years. There are also attractive opportunities in the untapped oil and gas sector.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.