Major defence contract win boosts momentum at engineering group
Specialist engineering group, Pressure Technologies, says it has enjoyed improving trading conditions driven by major defence contract placement and recovery in the oil and gas market.
Publishing its unaudited interim results for the 26 weeks to 1 April 2023, the Sheffield-based group, reports a group revenue rise of 45% to £13.8m (2022: £9.5m) along with a reported pre-tax loss of £1.4m (2022: loss of £2.3m).
The group operates across two divisions – Chesterfield Special Cylinders (CSC) and Precision Machined Components (PMC), and says that in light of the improved conditions in the oil and gas sector it has decided not to divest PMC at this time and will revisit strategic options for the business later in the year.
Chris Walters, chief executive, said: “Significantly improved performance in the first half of FY23 reflects the strong defence order book in Chesterfield Special Cylinders and the continued recovery of oil and gas market trading conditions in Precision Machined Components.
“In Chesterfield Special Cylinders, the order book reached the highest level on record following an £18.2m contract award to supply air pressure vessels for a major UK naval new construction programme.
“This order was the largest ever for the division, providing good visibility of high-value work through the remainder of FY23 and into FY24.
“In Precision Machined Components, the recovery of order intake levels during the first half of the year is expected to continue throughout the second half, as OEM customers report an increasingly positive oil and gas market outlook.”
Pressure Technologies completed fundraising of £2.1m (net of expenses) in December 2022. This was used to support its short-term working capital requirements and provide a bridge to profitable, cash-generative trading following placement of the major defence contract in February 2023.
The group notes refinancing of its debt facilities “has not progressed as quickly as originally expected.”
It says its Board continues to explore refinancing options and is engaged in constructive discussions with potential lenders.
The business adds its Board “has a reasonable expectation” that the refinancing can be completed in the remainder of the 2023 calendar year.
