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Pressure Technologies Plc - 2021 Interim Results

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Pressure Technologies plc

("Pressure Technologies" or the "Group")

2021 Interim Results

Pressure Technologies (AIM: PRES), the specialist engineering group, announces its interim results for the 26 weeks to 3 April 2021. 

Financial Highlights

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Group revenue of £14.5 million (2020: £13.9 million)

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Gross profit of £4.7 million (2020: £4.0 million)

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Adjusted operating profit1 of £1.1 million (2020: loss £0.1 million)

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Reported profit before tax of £0.2 million (2020: loss £1.5 million)

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Reported basic earnings per share of 0.8p (2020: loss per share 5.9p)

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Adjusted basic earnings per share2 of 2.9p (2020: nil)

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Adjusted operating cash outflow3 of £1.4 million (2020: inflow £1.4 million)

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Net cash4 of £0.2 million (3 October 2020: net borrowings of £7.4 million)

 

1 Adjusted operating profit is operating profit before amortisation, impairments and other exceptional items

2 Adjusted basic earnings per share is reported earnings per share before amortisation, impairments and other exceptional items

3 Adjusted operating cash outflow is operating cashflow before cash flow for exceptional items

4 Net cash/(borrowings) comprises cash and cash equivalents, bank borrowings, asset finance lease liabilities and right of use asset lease liabilities

Operational Highlights

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Overall Group revenue was 4% higher than the prior period, with a strong performance from Chesterfield Special Cylinders (CSC) more than offsetting continued weakness in Precision Machined Components (PMC)

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Strong defence order book underpinned a 79% increase in revenue for CSC and an increase in adjusted EBITDA1 to £3.3 million (2020: £0.7 million)

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Momentum gathering in the fast-developing hydrogen energy market, with over £1.4 million of refuelling station contract wins since December 2020 and improving visibility of future demand

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First hydrogen storage order placed by Shell under the five-year framework agreement announced in June 2020.  Second order expected imminently, both are for European refuelling station projects

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Investment in people and production facilities to support hydrogen growth has continued at the CSC Sheffield site and will deliver significant capacity increases by the end of 2022

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Long-term supply agreement established with steel tube manufacturer, Vallourec and strategic stock orders placed to meet hydrogen-related demand outlook and lead times

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Oil and gas trading conditions resulted in a 58% reduction in revenue for PMC and a negative adjusted EBITDA1 of £0.6 million (2020: positive EBITDA £0.7 million)

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PMC order book at May 2021 reached the highest level since October 2020 and OEM customers are reporting an improving outlook for the second half of 2021 and a steady recovery in 2022

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Long-term global supply agreement established by PMC with Schlumberger Technology Corporation, covering a wide range of precision machined parts for oilfield service applications

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Fundraising of £7.5 million in December 2020  supports exciting growth opportunities for CSC in the hydrogen energy market and in the Integrity Management services business and  significantly strengthens the balance sheet.

 

1 Adjusted EBITDA is operating profit/(loss) before depreciation, amortisation, impairments and other exceptional items

Chris Walters, Chief Executive of Pressure Technologies commented:

"The Group's strategy remains focused on the continued development and growth of both divisions and the Board is pleased with the progress being made. 

Strong performance in the first half of the year was driven by major defence and nuclear contracts in Chesterfield Special Cylinders, more than offsetting the weakness in its Precision Machined Components division which continues to be impacted by the challenging trading conditions across the oil and gas industry.

The backdrop of Covid-19 related challenges continues to impact the outlook in the second half. In Chesterfield Special Cylinders, project delays have affected the outlook for Integrity Management deployments, while defence contract phasing, late steel deliveries and several delayed customer orders are also expected to push significant revenue and margin from the second half of FY21 into FY22

However, the order book in Chesterfield Special Cylinders remains strong and momentum continues to gather in the fast-developing hydrogen energy market, with over £1.4 million of refuelling station contract wins since December 2020 and improving visibility of future demand.  The Group has also secured its first order with Shell under the five-year framework agreement announced in June 2020.  

Despite the impact of operational delays in Chesterfield Special Cylinders and the slower than expected recovery in the oil and gas market affecting Precision Machined Components, the Board remains confident in the prospects and opportunities for the business in the medium term."