Pressure Technologies plc
(“Pressure Technologies” or “the Group”)
2020 Preliminary Results
Pressure Technologies (AIM: PRES), the specialist engineering group, announces its preliminary results for the 53 weeks to 3 October 2020.
Financial Results
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Revenue of £25.4 million (2019: £28.3 million) |
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Gross profit of £5.3 million (2019: £9.2 million) |
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Adjusted operating loss* of £2.4 million (2019: £2.2 million operating profit) |
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Loss before taxation of £20.0 million includes £13.9 million non-cash exceptional impairment (2019: £0.5 million operating loss) |
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Net operating cash inflow** of £ 1.7 million (2019: £0.6 million) |
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Total net debt*** reduced to £7.4 million (28 September 2019: £11.4 million) |
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Bank facility extended to 30 November 2022 |
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Fundraising of £7.5 million (before expenses) from existing and new shareholders successfully completed in December 2020. |
* operating loss excluding amortisation, impairments and other exceptional costs.
** before cash outflow for exceptional costs and excluding cash flows associated with discontinued operations
*** total net debt includes gross borrowings, asset finance leases, right of use asset leases, less cash and cash equivalents
Group Highlights
Results
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Group revenue reflects challenging trading conditions, Covid-19 disruption and the deferral of a major defence contract from Q4 FY20 into Q1 FY21 |
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Adjusted operating loss driven by lower than expected gross margins in both divisions, the deferral of major defence contract revenue in Chesterfield Special Cylinders (CSC) and poor operational performance in Precision Machined Components (PMC) |
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PMC restructuring, site consolidation and other cost-saving measures were taken promptly in the second half of the year to address the impact of worsening oil and gas market conditions |
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Impairment of PMC goodwill and other intangibles driven by challenging oil and gas market conditions, which are expected to continue throughout 2021 |
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Strategic Progress |
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Board strengthened with a new Chairman and two new NEDs |
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Further strategic progress made in diversifying the PMC customer base and securing long-term strategic supply agreements with major OEMs for a wider range of specialised components |
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Diversification of end markets in CSC continues to reduce the historical dependence on the oil and gas sector, resulting in a strong order book for defence and nuclear power customers, with a second contract in excess of £3 million awarded by EDF Energy in September 2020 to supply several nuclear power stations in the UK with nitrogen storage packages for delivery through to mid-2021 |
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Growth continues for CSC in the fast-developing hydrogen energy market, with five refuelling station contracts secured in December 2020 for existing and new customers with a total value of around £0.5 million |
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Fifth consecutive year of strong growth in CSC's Integrity Management services, despite delayed deployments throughout the year due to Covid-19 travel restrictions. Positive outlook in defence, nuclear power, offshore services and hydrogen energy markets |
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Fundraising of £7.5 million before expenses in December 2020 provides a stronger balance sheet and the resources to capitalise on opportunities in the hydrogen energy market and to accelerate growth in Integrity Management services. |
Chris Walters, Chief Executive of Pressure Technologies commented:
“ Whilst these results reflect an extraordinarily challenging year, the operational changes and strategic progress made since 2019 put the Group in a stronger position to face the impact of the Covid-19 pandemic and depressed oil and gas market throughout FY20. I would like to thank all our employees for their continued hard work and commitment through this period.
We anticipate at least a further year of similarly challenging conditions in the oil and gas market, but the consolidation of sites, operational improvements, diversification of the customer base and new long-term strategic supply agreements position the Precision Machined Components division well for a return to profitability when market conditions recover.
Following a well-supported fundraising, we now have the balance sheet strength and resources to capitalise on the significant growth prospects for Chesterfield Special Cylinders in the hydrogen energy market and to accelerate growth in our Integrity Management services business.
First-quarter trading was in line with management expectations and we were delighted to secure five new hydrogen refuelling station contracts in December from a growing pipeline of opportunities with new and established customers.
Whilst we remain cautious regarding oil and gas market conditions, the increasing momentum in hydrogen and the strong orderbook for defence and nuclear customers underpin the Board's confidence in the outlook for 2021 and beyond.”