ressure Technologies plc
(“Pressure Technologies” or “the Group”)
TRADING UPDATE
Pressure Technologies (AIM: PRES), the specialist engineering group, provides the following trading update, ahead of its Annual General Meeting (AGM) which will be held today at 10:00am at Sopwell House, Cottonmill Lane, St Albans, Hertfordshire AL1 2HQ.
Chesterfield Special Cylinders
In Chesterfield Special Cylinders, the overall order book has reached its highest level for over five years, as order intake for high-value defence contracts increased during the first half of the year, with manufacturing scheduled to commence as expected in the second half.
Demand for Integrity Management and factory cylinder reconditioning services also increased steadily during the first half of the year and the lifting of Covid-19 travel restrictions is expected to further strengthen the order book for field deployments in the second half.
Momentum continues to build in the fast-developing hydrogen energy market and the visibility of future demand from existing and new customers is steadily increasing as the role of hydrogen is acknowledged in net zero carbon targets for transportation and industrial decarbonisation. As expected, during the first half of the year, the pipeline of opportunities for static and mobile hydrogen storage systems for delivery in the remainder of FY22 and FY23 grew significantly.
To meet the expected increase in demand from the hydrogen energy market, investment in the Sheffield facility continues to plan and is focused on delivering the capacity and operational efficiencies that will reduce lead times and improve contract margins.
Strategic steel tube stock purchased in 2021 and long-term agreements established with specialist steel tube suppliers, Tenaris and Vallourec, have helped to mitigate raw material cost inflation and support competitive lead times in all markets. Input costs are being continuously monitored to ensure they are sufficiently reflected in prices to customers.
Precision Machined Components
In Precision Machined Components, following a prolonged period of challenging oil and gas market conditions and Covid-19 disruptions, steadily improving enquiry and order intake levels are encouraging, as major OEM customers including Schlumberger, Halliburton, Expro and Baker Hughes continue to report a stronger oil and gas market outlook for the remainder of 2022 and beyond.
The divisional order book at the end of February was at its highest level since August 2020, helping to drive a return to profitability at the Roota Engineering and Martract sites over the twelve months. Focus remains on the recovery of profitability and cash generation from the Al-Met site, which is expected during this calendar year, as demand recovers from key OEM customers.
Outlook
As a result of an increasing order book, notwithstanding the current economic climate and cost-inflationary pressures across the Group's operations and supply chains, the Board remains confident in meeting full-year market expectations.
Board Changes
As announced on 28 February 2022, Chairman, Sir Roy Gardner and Non-Executive Director, Brian Newman, will step down from the Board and leave the Company following today's AGM. Nick Salmon joins the Board as Non-Executive Chair of the Company from 1 April 2022.
ENDS