Manufacturer’s share price crashes after dire warning

THE share price of Pressure Technologies crashed when the markets opened this morning after the Sheffield manufacturer issued a dire warning about its 2016 performance.

Its shares immediately fell 47%, to an all-time low of 92p, which values the company at less than £15m. In mid-2014, the group had a market value of more than £100m.

Pressure Technologies has warned its performance will be “substantially below” expectations as the difficulties in the oil and gas continue to take their toll.

The group has been reducing headcount to stay profitable. Worst affected has been Quadscot, whose primary end market is subsea oil exploration and production, which is an area that has been particularly hard hit by capital expenditure reductions and delays.

Quadscot forms part of Pressure Technologies’ precision machined components division, which has seen “an overall decline in the quantity and predictability of orders” in recent weeks.

The group’s businesses which are dependent on the oil and gas industry have experienced a further, substantial decline in orders in quarter two, which it said “has been complicated by unpredictable demand and very short lead times”.

Pressure Technologies is now forecasting the market will only begin to pick up next year.

In an announcement to the stock market, it said: “The board remains confident in the medium to long-term prospects for the group and believes that when the oil and gas market returns it will present considerable opportunities.

“In the meantime, we will take whatever measures are necessary to ensure the resilience of our businesses whilst continuing to invest in the future of the group and implement the strategic objectives to broaden our customer, technology and industrial base.”

 

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