Orbital Engine finally gets into gear By Ian Porter August 25, 2004
Page Tools Email to a friend Printer format It has accumulated losses of $480 million over the last decade, defeated the country's largest company and helped make a backyard inventor a near-billionaire.
But now, the sharemarket darling of three booms ago, Orbital Engine Corporation, has finally come good, reporting a modest profit of $3.4 million, its first surplus in more than a decade.
The managing director responsible for the need for black ink, Peter Cook, could not say when the company last reported a profit, as he only started in January 2002.
"Everyone has been asking me, is this the first profit, and the answer is, I don't know," he said yesterday.
"The company secretary thinks there may have been one in about '92 or '93, but we're not sure," he said with a laugh.
The company got off to a booming start in the 1980s after Ralph Sarich won ABC Television's inventor of the year award with his orbital engine back in the 1970s.
The public was excited, an altruistic BHP took a 25 per stake and the future looked bright, except that the engine was not viable and was quickly dumped.
Fortunately, Orbital kept the unique pneumatic fuel injection system, which is the company's principal product today. But, while there were lots of tyre-kickers, the company never landed the big contract for mass production.
By 1992, Mr Sarich lost interest, resigned as chairman and managing director and started selling his shares for more than $3 each. He realised tens of millions of dollars and did what any rational investor would do: he bought property in Perth's central business district. The last BRW Rich List estimated his worth at $770 million.
BHP saw the light some years after, and finally unloaded its stake in 1998 and 1999 at prices below $1.
Now Orbital sells injection systems for outboard motors and scooters and Mr Cook says soaring oil prices and stricter emission rules are bringing the future closer by the day.
OEC Price at posting:
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