TIDMPRES
RNS Number : 1533S
Pressure Technologies PLC
12 November 2021
Pressure Technologies plc
("Pressure Technologies" or the "Group")
FULL-YEAR TRADING UPDATE, BOARD CHANGES AND NOTICE OF
RESULTS
Pressure Technologies (AIM: PRES), the specialist engineering
group, provides a trading update for the 52 weeks ended 2 October
2021.
The Group expects to report full-year results in line with
market expectations.
Revenue of approximately GBP25 million (2020: GBP25.4 million)
and an adjusted operating loss(1) of c.GBP0.8 million (2020: GBP2.4
million loss) reflect a strong performance in defence, nuclear and
hydrogen energy markets, offset as expected by the impact of
difficult trading conditions in the oil and gas market, supply
chain disruptions and the delay of Integrity Management deployments
from the second half of the year into FY22 and FY23.
CHESTERFIELD SPECIAL CYLINDERS
Chesterfield Special Cylinders (CSC) delivered revenue of
approximately GBP18.6 million (2020: GBP11.2 million) and is
expected to report an adjusted operating profit (1) of c.GBP2.5
million (2020: GBP0.1 million loss).
The phasing of major defence contracts resulted in significantly
higher revenue and profitability in the first half of the year,
which also included the positive impact of a major defence contract
delayed from FY20 into Q1 FY21. Revenue for UK and export defence
contracts was approximately GBP11.0 million (2020: GBP5.1 million)
and the contract pipeline continues to strengthen, providing good
visibility of major naval construction and refit programmes going
into FY22.
As expected, momentum has continued to build in the
fast-developing hydrogen energy market, with revenue of
approximately GBP2.2 million (2020: GBP0.2 million) driven by the
success of CSC's optimised Type 1 steel cylinder designs that meet
customer demand for safe and efficient hydrogen storage across
projects in the UK, Europe and Australia.
As governments increasingly acknowledge the role of hydrogen in
net zero carbon targets for transportation and in decarbonising
industry, hydrogen energy storage remains a strategically important
market for the Group. The pipeline of opportunities for static and
mobile hydrogen storage systems continues to grow and the
visibility of future demand is improving.
Collaboration with our major steel tube suppliers has been
strengthened further to support competitive product development and
to underpin the delivery of our future order book. The purchase of
strategic steel tube stock for popular hydrogen cylinder designs in
early 2021 has proved to be important in mitigating raw material
cost escalation, supply chain disruption and increasing lead
times.
PRECISION MACHINED COMPONENTS
Precision Machined Components (PMC) delivered revenue of
approximately GBP6.4 million (2020: GBP14.2 million) and an
adjusted operating loss (1) of c.GBP1.7 million (2020: GBP0.7
million loss), reflecting the challenging trading conditions in the
oil and gas market throughout FY21.
As expected, the demand for subsea well intervention tools,
valve assemblies and control module components continued to recover
strongly from March 2021, exceeding pre-pandemic order intake
levels and resulting in a profitable second half of the year for
our Roota and Martract sites.
However, this improving performance was offset by the slower
than expected recovery in demand for subsea trees and the
associated production drilling and flow control components, which
severely impacted order intake at our Al-Met site. In addition,
Covid-19 disruption and supply chain constraints resulted in
several delays to output.
Cost-saving measures completed in February 2021 helped to
minimise losses and conserve cash, whilst previous investments in
equipment, systems and people have underpinned continuous
improvement in operational efficiency and competitiveness.
Further strategic progress has been made on reducing customer
concentrations and extending the range of products covered by the
long-term supply agreements established over the past two years. We
have also made initial progress in diversifying our end markets,
with the first orders secured for offshore wind turbine components
and for specialised fittings for UK defence projects in
collaboration with CSC, which are expected to continue into
FY22.
Our focus remains on the recovery of profitability and cash
generation. We are encouraged by recent increases in order intake
and by efficiency and margin gains achieved from operational
improvements. Major OEM customers are reporting a stronger outlook
for the oil and gas market during 2022 and while we remain cautious
regarding the pace of recovery, the division is well placed to
deliver an improved performance in FY22.
BANKING
In June 2021, the Group announced that it was in default under
the terms of its Revolving Credit Facility (RCF) with Lloyds Bank
due to a minor breach of covenant relating to interest cover. We
are pleased to announce that amendments to the RCF were agreed with
Lloyds Bank in October 2021 and the default has been remedied.
The RCF has been reduced from GBP6.0 million to GBP4.0 million
and the facility term has been extended from November 2022 to June
2023.
BOARD CHANGES
Sir Roy Gardner has informed the Company of his intention to
step down as Chairman and Non-Executive Director before the next
Annual General Meeting in March 2022, considering his other
personal commitments. With ample notice of Sir Roy's intentions, a
process has been initiated to identify and appoint a Non-Executive
Director to succeed to the position of Chair and to ensure a smooth
handover. Sir Roy will continue to support the Company in an
advisory role.
Since his appointment in January 2020, Sir Roy has overseen
important developments in the Group, including the strengthening of
the Board and the successful GBP7.5 million fundraising in December
2020, providing the Group with the resources to capitalise on
opportunities in the hydrogen energy market and accelerate growth
in Integrity Management services.
NOTICE OF RESULTS
On 15 December 2021, the Group will announce its preliminary
results for the 52 weeks to 2 October 2021.
1 Adjusted operating profit/(loss) is operating profit/(loss)
before amortisation, impairments and other exceptional items
END
For further information, please contact:
Pressure Technologies plc Tel: 0330 015 0710
Chris Walters, Chief Executive PressureTechnologies@houston.co.uk
James Locking, Chief Financial Officer
N+1 Singer (Nomad and Broker) Tel: 0207 496 3000
Mark Taylor / Asha Chotai
Houston (Financial PR and Investor Relations) Tel: 0203 701 7660
Kate Hoare / Kay Larsen / Ben Robinson
COMPANY DESCRIPTION
www.pressuretechnologies.com
With its head office in Sheffield, the Pressure Technologies
Group was founded on its leading market position as a designer and
manufacturer of high-integrity, safety-critical components and
systems serving global supply chains in oil and gas, defence,
industrial gases and hydrogen energy markets.
The Group has two divisions, Chesterfield Special Cylinders and
Precision Machined Components.
Chesterfield Special Cylinders (CSC) - www.chesterfieldcylinders.com
-- Chesterfield Special Cylinders, Sheffield, includes CSC Deutschland GmbH.
Precision Machined Components (PMC) - www.pt-pmc.com
-- Precision Machined Components includes the Al-Met, Roota
Engineering, Quadscot Precision Engineers and Martract brands.
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END
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