Engineering group completes restructure and strengthens its divisions

Specialist engineering group Pressure Technologies has undergone a major restructure and continues to look to strengthen its divisions outside of the oil and gas markets. 

In its annual results for year-end 30 September published this morning, the Sheffield firm reported revenues of £38.4m, up from £34.8m last year. Its pre-tax loss stood at £1.9m, compared to a loss of £400,000 in 2016.  Its closing net debt was reported as £11.1m, up from £6.6m. 

Operating profits were £1.1m, up from a loss of £400,000 recorded last year. The increase in revenue was driven by a 40% increase in sales seen in Alternative Energy on the back of a strong opening order book. Operating cash inflow before movements in working capital and reorganisation and redundancy costs was £2.5m, from £500,000 last year.

The firm confirmed its post year-end fundraising through a share placing of £4.8m.

Pressure Technologies has undergone a restructure in its alternative energy division, previously operating with a regional model it now has its head office operation running from Vancouver while its sales and engineering element runs locally for UK, Europe and Asia. The division also broke even; up from a loss of £1.1m in 2016. 

Speaking to TheBusinessDesk.com this morning, CEO John Hayward said the firm had welcomed a new division president in Vancouver from a leading alternative fuel firm. He added: “That’s a vote of confidence in our business.”

Hayward added there was a sense of optimism in the oil and gas market, as there had been a “significant recovery”  and that an uplift in orders across the group  had continued into the first quarter of the firm’s current financial year.

Of the firm’s standing in the oil and gas sector, he said: “As we work with the very large oil services across multiple sites, we are seen as low risk. And because we are AIM-listed, we are seen as stable and transparent.”

Hayward added: “The reorganisation in recent years means that there are significant operational gearing gains to be made as volumes increase. The recent share issue improves the Group’s ability to support large-scale organic growth, and with no immediate major capital expenditure required the Group is in good shape.”

Hayward said that due to unprecedented market conditions, the group had reduced headcount by 40%. He added:  “But (we) have been careful to protect our knowledge and skills base, to be well positioned to respond to increased demand when it arrives. We have also invested in further development of our people and added key leadership and sales resources across the Group.

“Given the tough market conditions we’ve traded through for the past three years, I’d like to express my respect and admiration for the way our people have steadfastly risen to the various challenges we’ve encountered.”

The firm saw its Precision Machined Components (PMC) Division order intake become more consistent, with a stronger second-half. Its manufacturing gross margins increased to 35%, from 31% last year. 

It acquired Martract in December 2016 and created a collective PMC brand to give an improved customer offer.

Pressure Technologies also undertook a full review of management capability, resulting in additional senior management appointments and invested in IT systems to improve communication and promote collaboration

Hayward added: “It is heartening to report that, towards year-end, we were approached by institutional investors who expressed a desire to make further investment in the Group. I see this as a sign that many market observers anticipate that the oil and gas market is about to rebound and they see Pressure Technologies as an enterprise that has been resilient in the downturn and is primed for growth. This investment gives us more fire power to react to opportunities as they arise.

“Whilst the oil and gas market has been in the doldrums, we have of course been busy pursuing other industrial sectors. The biogas market continues to offer substantial potential, but has been frustratingly slow to deliver due to a whole range of factors, but we remain committed to retaining and building on our position as the market leader within our sphere.”

The firm said its Chesterfield Special Cylinders brand, CSC’s market leadership in large high-pressure cylinders, is still the “company of choice” for many of the world’s navies and air forces.

A new managing director of the machinery business will join the group in the next quarter.