The Investment column: Dowding in an expansive mood

Dowding & Mills, which has been servicing electric motors since 1919 and on the stock market since 1946, is on a roll and interim figures yesterday, showing profits 27 per cent higher at pounds 7.12m, confirmed that recent diversifications are paying dividends.

Traditionally a bellwether of the engineering industry it serves, analysts believe expansion into the goldmining areas of the US and Australia means Dowding is less constrained by the economic cycle. Recent consolidation in its traditional motor rewind businessshould also be beneficial.

As well as rewind, which offers few opportunities for growth, given Dowding's dominance of the home market, the company is involved in repairing permanent magnets such as those found in robots and automated plant. In Australia many automotive manufacturers send motors back to Japan for repair and there are good opportunities for a local servicer.

Elsewhere, the market for mechanical repairs is much larger than that for rewinds. With an increasing trend towards outsourcing firms will pay for competent prompt service such as Dowding can provide. Calibration, which Dowding entered in 1990, is a growing market and the trend towards outsourcing should create a steady flow of new business. On the basis of forecast profits of pounds 14.4m in the year to June and pounds 17.3m next time, the shares, down 1p to 80p yesterday, trade on an undemanding p/e ratio of 14 falling to 11. Good value.