MIDAS SHARE TIPS: Formula that cuts fuel bills can help power profits
Jim Redman was a legend on the 1960s motorcycle circuit. Known as the thinking man's rider, he was a six-time world champion with 46 Grand Prix wins to his name. Son Jimmy may not have been as committed a biker but he inherited his father's passion for engines, inventing a solution that makes motors more efficient, saves costs and helps the planet.
Having created the product, Redman founded a company to develop and sell it.
Today, SulNOx is listed on the Aquis exchange, the shares are 24p and should move substantially higher this year and beyond.
SulNOx offers two versions of the original technology, SulNOxEco for petrol and diesel engines and Berol for the sort of heavy fuel used by ships. The solutions improve combustion, reduce toxic emissions and cleanse engines from the inside, so cutting fuel consumption and maintenance costs.
Each product is made from natural ingredients and demand is growing among customers, from German shipowners to Ghanaian bus drivers. The appeal is not hard to understand.
Plain sailing?: Green lobbyists are campaigning vigorously for measures to combat climate change – and transport accounts for around a quarter of greenhouse gas emissions
A typical UK motorist can save more than £300 a year by using SulNOxEco and ensure their car works better for longer. For ships, annual savings can amount to more than £150,000, so fleet owners can cut costs by millions of pounds and burnish their environmental credentials at the same time.
Green lobbyists are campaigning vigorously for measures to combat climate change – and transport accounts for around a quarter of greenhouse gas emissions, according to the United Nations. But change will take time.
Today, electric cars account for little more than 2 per cent of the global market and enthusiasm is waning across the developed world. Most large vehicles, such as trucks, tractors and trains, cannot run on electricity. Nor can ships, which use particularly heavy polluting fuel.
The electric vehicle sector is not entirely green either. According to carmaker Volvo, emissions from making these cars can be 70 per cent higher than those associated with traditional petrol models and they need to be driven for up to nine years to offset their carbon footprint.
SulNOx reduces emissions immediately, and can be effortlessly added to a vehicle or vessel's fuel tank. Engines need no modification and improvements are instant. Products can be used for generators, tankers and trawlers too.
The company has even devised a way of turning wastewater at sea into usable fuel. Estimates suggest that universal take-up of SulNOx could slash global CO2 emissions by more than 500 million tons, equivalent to Saudi Arabia's annual carbon footprint. In the UK alone, SulNOx could cut noxious emissions by 10 million tons, equivalent to taking 5 million cars off the road.
The benefits go further. Every year, millions of older, lower-quality cars are exported from Europe, the US and Japan to poorer countries in Africa and Asia. Most would fail safety and environmental standards in the developed world but aspiring motorists in emerging markets are only too happy to have them.
SulNOx removes harmful toxins and is already in use by bus drivers in Ghana, saving them money and improving local livelihoods. CEO Ben Richardson is also in talks with fuel traders and distributors to add the product to the pump at petrol and diesel stations across Africa.
Major shipowners are trialling SulNOx products too, endorsement has been wide-ranging and commercial contracts are expected to be signed this year.
Shipping magnate Constantine Logothetis invested in the firm last year, amassing a stake of more than 23 per cent in the past six months. Norwegian investment firm Nistadgruppen is a substantial investor too, using its clout to introduce Richardson to the Scandinavian shipping market.
Legend: SulNOx founder Jimmy Redman's father Jim
SulNOx is in transition. Revenues in the year to last March amounted to £203,000, mainly from sales to individual motorists and small fleet owners. After expenses, losses were almost £2 million.
The future should look very different. Advanced discussions are underway with several large potential customers so turnover should increase materially, with profits flowing thereafter. There is also a possibility of dividends, as the business becomes more established.
Midas verdict: The world is under pressure to become greener fast. SulNOx products are a quick, easy and effective way to reduce emissions and save costs for motorists and big companies alike. As a loss-making company, SulNOx is not without risk but, with a fair wind, the shares could go far. At 24p, they are definitely worth a punt.
Traded on: Aquis Ticker: SNOX Contact: sulnoxgroup.com or 020 3441 5363