Pressure Technologies (LON:PRES), the specialist engineering group, today announced its preliminary results for the year ended 28 September 2019.
Financial Results*
● Group revenue up 34% to £28.3 million (2018: £21.2 million)
● Gross profit up 27% to £9.2m (2018: £7.2 million)
● Adjusted operating profit more than doubled to £2.2 million (2018: £1.0 million)
● Reported loss before tax of £0.5 million (2018: loss £1.7 million)
● Adjusted earnings per share of 7.8p (2018: 2.9p)
● Reported basic loss per share of (2.1)p (2018: (7.5)p)
● Adjusted net operating cash inflow** £2.0 million (2018: £1.9 million)
● Net debt of £11.4 million (2018: £6.7 million)
● Operating cash outflow from discontinued operations of £2.5 million
● Working capital increased by £2.2 million to £7.4 million (2018: £5.2 million)
* continuing operations only excluding acquisition costs, amortisation on acquired businesses and exceptional charges and credits
** before cash outflow for exceptional costs
Operational Highlights
● Improved trading performance and operating results in line with market expectations, driven by UK and export defence contracts and increasing momentum in the global oil and gas market
● Strategic progress made with the divestment of non-core operations, recovery of profitability and organic growth in both divisions
● Integration of Precision Machined Components (PMC) subsidiary companies completed, with operational improvements made across the division demonstrating scalability and growth, with margins improved since year end
● Order backlog in PMC took longer to clear than anticipated, leading to an increase in working capital during the year. Working capital is expected to unwind with improving cash flows during the first half of 2020 as operational changes take effect and the backlog of overdue orders is delivered
● PMC order intake for the year to November 2019 reached the highest level for over five years, with record contract awards contributing to a divisional order book 70% higher than a year ago. Revenues from new customers represented 11% of the divisional total in 2019, demonstrating progress in reducing customer concentrations
● Strong and increasingly diverse order book in Chesterfield Special Cylinders (CSC), following the largest ever non-defence contract award from EDF Energy and further orders secured in the emerging hydrogen energy market since year end
● Outlook for CSC in established UK and export defence programmes remains strong and further growth is forecast in recurring revenue from through-life Integrity Management services.
Chris Walters, Chief Executive of Pressure Technologies, said:
“I am pleased with the significant improvement in trading performance this year. We have made important management and operational changes within the business over the course of the year. I am pleased with the way our teams have responded during this transitional period and encouraged by the progress we have made with organisational development and culture that is key to delivering sustainable growth.
Order backlog and delayed output increased working capital during the year, but I am confident that this will unwind early in the new year as the backlog is cleared and operational initiatives take effect, delivering shorter lead times, improved margins and recovering cash flows.
Good strategic progress and the favourable conditions in core markets underpin our confidence in the outlook for 2020 and beyond. Both divisions hold strong order books with reduced customer concentrations and have recently posted record contract wins from an increasingly diverse and buoyant sales pipeline.”
