Third World growth gives Peek green light for further expansion

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PEEK, the traffic light company, has a fish tank in one of its offices containing a working computer and some goldfish. There used to be a piranha in the tank - put there to guard the valuable computer from lightfingered passers-by - which is why there is a still a sign warning that piranhas are at work.

A piranha is an apt symbol for the Henley-on-Thames company. It gobbled up some 34 companies in recent years, spitting out a handful that were not to its taste. Now the company, which is announcing its results this week, plans to indulge in another feeding frenzy.

"What we'd like to do is start making acquisitions on our measurement side and build it up the way we did with traffic control," said Allen Standley, chief executive. "We're currently looking at half a dozen deals."

The company is well placed to go on the hunt. It has been consistently cash generative for five years, and had a war chest worth pounds 8.9m at the end of 1994. Its interim results, due out this week, are expected to show a pounds 3.5m profit, with year-end forecasts at pounds 11.3m.

Peek is worth pounds 119m now, but was moribund a decade ago. Its main business then was the supply of animal feed to Liverpool docks. But under the direction of former chief executive, now chairman, Ken Maud, it has shifted entirely into electronics, becoming the world's second largest traffic light firm after Germany's Siemens.

Recent developments in computer controls for traffic lights, combined with a growing public opposition to new roads, have made the field a growth area. A new system in Chester that, according to Peek, cuts travel times by 15 to 20 per cent, cost pounds 1.5m, a sum that would pay for just 400 yards of new blacktop.

The company is also benefiting from rapid economic growth in the Far East, where prosperity is replacing bicycles and rickshaws with cars and vans. Its biggest coup to date was winning the pounds 17m contract to build the first two phases of Bangkok's new traffic control system, covering 370 intersections.

But while traffic control is the largest part of the company's business, it is not the only one. About 30 per cent of Peek's sales come from a range of equipment for collecting and manipulating data in the field. Best known of these are its Husky computers, which have light but strong magnesium cases to withstand falls and immersion in water - even rivers full of voracious fish. Their screens are designed to take the impact of a one-inch steel ball falling from two metres without cracking.

About 15,000 Huskys are sold each year to companies with operations in the wilderness, particularly those in the oil and telecommunications sectors.

It also makes monitors that can tell the pressure, density and flow rate of fluids in pipe- lines using sonar from the outside of the pipe. Its custom- ers range from water utilities and brewers to the petro-chem- ical industry.

It is this sector that the company now wants to expand, with a string of potential targets in the UK and America. Among them are companies that specialise in analysing water, which would fit nicely with its monitoring equipment.