Paul Hill's tip of the week: Is this the next Tetra-pak?

Paul Hill has trawled through the week's press and broker reports to pick the week's best share tip: Occasionally an innovative product comes along that is brilliant in its simplicity. The Tetra-Pak and Dyson vacuum cleaner are prime examples, as is this newly launched and patented product.

Tip of the week: Timestrip (Aim: TIME),tipped as a BUY by Evolution Securities

Timestrips are single-use, disposable labels, which sell for around 3.5p each and which tell you how long there is to go before perishable goods become unusable. But it's not just about warning when food is out of date. The strips can also tell you whether temperature-sensitive fluids have been accidentally frozen, for example. This is important in the pharmaceutical industry, where freezing vaccines for diptheria, tetanus, and hepatitis B can stop them from working properly. Timestrips can even be used for water filters or air-freshener refills.

For such a tiny company, Timestrip has already won an impressive client list, including Henkel, Nestl, Bayer and Whirlpool. Timestrip could become huge as it gives firms a way to distinguish their products in a competitive market. But before we get carried away, what are the risks? As is often the case with any new technology, it may take longer to be introduced than expected, especially with its large multinational customers. Secondly, as the business is relying on its one product, there is always a chance that a competitor will copy the idea without infringing the patent. And as cash burn is around £2m a year, the firm could be forced into a fund-raising towards the end of the year. Revenues are predicted to rise from £0.375m in 2006 to £2.9m in 2007. My guess is that to break even, the firm will need a turnover of around £4m so, assuming the strong growth continues, the firm should move into profitability sometime in 2008.

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