The Hewland engine (as Kasper said) was 3 cylinder inline 750cc water cooled, & the bulge aft of the u/c is the cowling over the radiator. The radiator was recessed up into the fuselage. It started off completely buried, but overheated on first flight, so was subsequently hung out in the breeze a bit more.
Yes, as Planedriver noted, it was built at Sandown on the Isle of Wight. CEO was Richard Noble, who started ARV after he got the land speed record.
Originally, the firewall forward was arranged to accept one of 3 engines, depending on how their development progressed. One was a flat 4 horizontally opposed 4 stroke engine by Lotus, which didn't get beyond a very sexy mockup. The second was a Wankel rotary engine made by Norton (of motorcycle fame). They were unwilling to see it in an aeroplane.
Mike Hewland was very enthusiastic, and agreed to add a 3rd cylinder to his prototype 50 hp twin to give 75 hp. It was a great little engine, with gear reduction drive (not surprising as at that time, mid 80's, Hewlands supplied most of the Formula 1 teams' gearboxes.
ARV certificated the AE75 engine for full Public Transport use, which was a huge achievement given the CAA's initial response. It was a very high power-to-weight ratio engine, & if the Super2 were to truly break the mould of Cessna 150/Cherokee type planes, it had to start with a new engine. Remember this was 4 years before Rotax released the 912. Although there was a lot of market resistance from 'conventional' pilots to flying behind a 2-stroke (& little has changed since), the Super2 handled so well in the air that 34 were sold before ARV went bust, with about half going to flying schools.
Ironicallly, it was a minor development problem with Mike Hewland's engine which led to a collapse in sales, and shortly after the failure of ARV.