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Hydrodec, a specialist in recycling industrial oils, has seen its share price tick up over the past year, aided by stakebuilding by Betfair founder Andrew Black and the recruitment in January of chief executive Ian Smale, a former high-ranking BP executive.

Its business is laudable – taking spent industrial oils, primarily the toxic transformer oil used in electrical generation, and recovering them for reuse while eliminating any harmful chemical content.

Results earlier this month saw annual revenues jump by a quarter to $22.4m as utilisation of plants in the US and Australia improved, though the company continues to run at a pre-tax loss, which hit $9.5m in 2011. A joint venture in Japan is also poised to boost demand for its technology.

A tightening in the supply and improved margins in the niche market of virgin transformer oil has seen investors and lenders bet that the growing global fleet of generators will play into the hands of the Aim-quoted alternative supplier.

However, investors should recall the sharp rise then fall in its share price experienced between 2007 and 2009, when failure to secure contracts in the US badly hit expansion plans and sentiment.

Copyright The Financial Times Limited 2017. All rights reserved.

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