Freeplay powers its way to an Aim float

THE wind-up radio and torch company founded by inventor Trevor Baylis is heading for a $20m (£10.6m) stock market float.

Freeplay Energy is set to list on Aim on 2 March. Baylis's breakthrough clockwork technology was heralded by politicians, celebrities and charities in the 1990s because it brought radio and light and power to ThirdWorld countries.

As well as receiving a Government grant, it got a total of $40m in funding from The Body Shop founders Anita and Gordon Roddick, Liberty Life, General Electric and the South African German Cultural Foundation.

With support in Western countries, where its wind-up and solar-powered products are popular with campers, boaters and anglers, Freeplay sold three million radios and torches between 1996 and 2000, had sales of almost $40m in that time, employed 450 people, and was valued at $40m for an intended float on the US Nasdaq market.

But that never came off. The company was unable to make a profit and - under chief executive Rory Stear, who bought the technology from Baylis in 1994 - was consuming vast amounts of cash as it sought to expand globally.

However, a restructuring of the company in 2001, in which manufacturing and distribution were outsourced and 400 jobs slashed, pushed Freeplay into profit for the first time by 2003. With gross profit margins close to 40% last year and sales of $15m, Stear believes the Aim listing, valuing the company at $20m, is perfectly timed.

'Sales are on a strongly upward trajectory. And with our new business model, the economies of scale are very attractive,' he says. 'If we double turnover, I'd only need to add a few staff, so profitability will increase exponentially.

'We are now focused on our core competencies: R&D, supply-chain management and marketing. The new business model allows us to preserve capital and expand global reach.'

Freeplay now licenses its technology, with Freeplay-driven products selling through Motorola (which makes a wind-up mobilephone charger) and US camping equipment company Coleman (torches and radios). Stear promises 10 product launches in the next year, including a foot-powered generator.