TIDMPRES
RNS Number : 4434O
Pressure Technologies PLC
03 October 2023
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
UK version of the EU Market Abuse Regulation (2014/596) which is
part of UK law by virtue of the European Union (Withdrawal) Act
2018, ("MAR"), and is disclosed in accordance with the Group's
obligations under Article 17 of MAR. Upon the publication of this
announcement via a Regulatory Information Service, this inside
information will be considered to be in the public domain.
3 October 2023
Pressure Technologies plc
("Pressure Technologies" or "the Group")
Post-Close Update
Pressure Technologies plc (AIM: PRES), the specialist
engineering group, announces a business update and its expected
unaudited post-close results for the financial year ended 30
September 2023 ("FY23").
FY23 Post-Close Results
The Group's unaudited results (1) for FY23 are expected as
follows:
GBP'million FY23 FY22
Revenue 32 25
Adjusted EBITDA(2) Profit / (Loss) 2.0 (0.9)
Order Intake 43 25
Closing Order Book 21 10
Net Debt (3) (2.4) (3.5)
Net Bank Borrowings (4) 0.0 (0.6)
1 These post-close results have not yet been audited and are
therefore the results that the Group expects to report for FY23.
The post-close results have been prepared on the going concern
basis using the existing accounting policies of the Group.
2 Adjusted EBITDA Profit / (Loss) is earnings before interest,
tax, depreciation, amortisation and other exceptional costs.
3 Net Debt comprises cash and cash equivalents, bank borrowings,
asset finance lease liabilities and right of use asset lease
liabilities.
4 Net Bank Borrowings comprises cash and cash equivalents and
bank borrowings only.
The Group is expected to report revenue of approximately GBP32
million (FY22: GBP25 million) in FY23, representing like-for-like
growth of 28%, underpinning a return to profitability with an
expected Adjusted EBITDA of approximately GBP2.0 million (FY22:
loss of GBP0.9 million). This performance was driven by Group order
intake of approximately GBP43 million (FY22: GBP25 million) in the
year, a 72% increase on prior year, supporting an order book of
approximately GBP21 million (FY22: GBP10 million) at year-end,
providing much improved visibility of forward revenue. The expected
Adjusted EBITDA is slightly below the guidance issued in June 2023
due to the slippage of revenue from a small number of projects into
the first quarter of FY24.
Chesterfield Special Cylinders (CSC) is expected to report
revenue of approximately GBP21 million (FY22: GBP18 million) with a
strong performance in the second half of the year driven by
activity on a major UK defence contract secured in February 2023,
underpinned by recent operational improvements. CSC Adjusted EBITDA
in the year is expected to be approximately GBP3.6 million (FY22:
GBP1.1 million), a significant improvement on prior year. CSC order
intake in the year was approximately GBP25 million (FY22: GBP16
million), supporting an order book of approximately GBP11 million
(FY22: GBP7 million) at year-end.
Precision Machined Components (PMC) is expected to report
revenue of approximately GBP11 million (FY22: GBP7 million), an
increase of 57%, with improved performance in the second half of
the year driven by the recovery in order intake from major oil and
gas OEM customers since March 2023. This has underpinned a return
to profitability with expected Adjusted EBITDA of approximately
GBP0.3 million (FY22: loss of GBP0.3 million). PMC order intake in
the year was approximately GBP18 million (FY22: GBP9 million), a
100% increase on prior year, supporting an order book of
approximately GBP10 million (FY22: GBP3 million) at year-end and
providing the best visibility of forward revenue seen in the last
five years.
Central costs (before exceptional items) in the year are
expected to be approximately GBP1.9 million (FY22: GBP1.7 million),
slightly higher than prior year due to general inflationary
pressures.
The FY23 post-close results above have not yet been audited. The
Group has appointed Cooper Parry as its new auditors and expects
that the FY23 audited Annual Report & Accounts will be released
in January 2024.
FY24 Outlook
The financial year ending 30 September 2024 ("FY24") is expected
to be a year of transition for CSC. During the first half of FY24,
CSC will continue to focus on delivering consistent operational
performance and expects to pass the peak of activity on high-value
UK defence contract milestones in the second quarter. The division
then expects to re-balance its revenue profile across UK defence
programmes, global defence programmes and the hydrogen energy
market in the second half of the year, with each of these markets
presenting significant opportunities over the medium-term. During
this transitional period, CSC revenue is expected to decline
marginally on FY23 levels with a consequent reduction in divisional
profitability in FY24.
The Board expects PMC to continue to operate at its current
improved rate of activity and to generate further year-on-year
growth in revenue and improved profitability in FY24, based upon a
robust outlook for order intake from the oil and gas sector,
improved pricing and manufacturing efficiencies.
As a result of these divisional trends, the Board expects FY24
Group revenue and profitability to increase slightly over FY23
levels.
Debt Facilities & Refinancing
The Group made a scheduled repayment of GBP1.0 million to Lloyds
Banking Group on 29 September 2023 from existing cash resources.
This reduced the remaining debt balance payable to Lloyds to GBP0.9
million which the Group expects to repay in full on 31 December
2023, at which point the facility will expire.
Following the repayment of GBP1.0 million on 29 September 2023,
the cash balance at the end of the year was approximately GBP0.9
million (FY22: GBP1.8 million). Net debt, which comprises cash,
bank borrowings, asset finance lease liabilities and right of use
asset lease liabilities, was approximately GBP2.4 million (FY22:
GBP3.5 million) at the end of the year. Net bank borrowings, which
comprises cash and bank borrowings only, was approximately GBPnil
(FY22: GBP0.6 million) at the end of the year.
The Group has continued to explore options for raising
additional finance to provide increased working capital headroom
and to fund the transition of CSC into the hydrogen energy market.
The Board is in constructive discussions to raise new finance and
will update further in due course.
Strategic Options for PMC Division
In June 2023, the Board paused the sale of PMC and undertook to
revisit strategic options for this division later in the year.
The Board has noted the continued improvement in oil and gas
market conditions, including the recent strengthening of the price
of oil, which has driven the much improved trading performance of
PMC in the second half of FY23. The current trading environment,
improved prospects and positive developments being made by the PMC
division enhance the Board's optionality in respect of delivering
future shareholder value from this division.
Chris Walters, Chief Executive of Pressure Technologies plc,
commented:
"Strong order intake in both divisions and recent operational
improvements have driven a more consistent performance in the
second half of FY23 which has enabled a return to much improved
levels of profitability. We continue to see opportunities for
further margin improvement in both divisions.
Global defence programmes present strong opportunities for
Chesterfield Special Cylinders and we remain well positioned to
transition into the developing hydrogen energy market to supply
static and mobile storage solutions, and to provide the
through-life inspection, testing and recertification services for
these safety-critical systems over the longer term."
Additional Information
The person responsible for arranging release of this
announcement on behalf of the Company is Steve Hammell, Chief
Financial Officer.
For further information, please contact:
Pressure Technologies plc Tel: 0333 015 0710
Chris Walters, Chief Executive
Steve Hammell, Chief Financial
Officer
Singer Capital Markets (Nomad Tel: 0207 496 3000
and Broker)
Rick Thompson / Asha Chotai
Houston (Financial PR and Investor Tel: 0204 529 0549
Relations) pressuretechnologies@houston.co.uk
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 and hydrogen energy markets.
The Group has two divisions:
-- Chesterfield Special Cylinders (CSC) - www.chesterfieldcylinders.com
-- Precision Machined Components (PMC) - www.pt-pmc.com
o Includes the Al-Met, Roota Engineering and Martract sites.
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Pressure Technologies (LSE:PRES)
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