The Phoslock Environmental Technologies Ltd (ASX: PET) share price has now quadrupled in 2019 from 35 cents per share at the start of the year to $1.40 today. Based on 555.5 million shares on issue it now has a market value around $778 million so let's take a look a brief look at what's behind the rise.
According to its website Phoslock "provides innovative water technologies and engineering solutions to manage nutrients and other water pollutants."
Its best selling product named Phoslock was developed by the government scientific research body CSIRO and helps clients achieve clean water bodies by significantly reducing excess phosphate from the aquatic environment.
As at September 23 it'll be added to the S&P/ASX 300 Index in a move that is likely encouraging buying of the shares in anticipation of index-tracking funds being forced to add it upon its inclusion.
Other companies set to be included are iSignthis Ltd (ASX: ISX) and Avita Medical Ltd (ASX: AVH).
For the six months ending June 30 2019 Phoslock reported a net profit of $1 million on revenue of $10.2 million. It will also pay a maiden 0.5 cent per share dividend. The business is also debt free.
It reports on a calendar year basis and for 2019 is forecasting a profit before tax between $6 million to $8 million, which is around double on the prior year. Total revenue is expected to be between $27 million to $30 million.
As such we can see why some investors are taking a shine to this rising small cap.
