Mixed picture at engineering group as division hit by delays and deferrals
Engineering group, Pressure Technologies, says one of its divisions was hit by deferral of revenue on major defence contracts and by operational delays, as it issues unaudited interim results for the 26 weeks to 30 March 2024.
The Sheffield-headquartered group, which operates across two divisions – Chesterfield Special Cylinders (CSC) and Precision Machined Components, (PMC) made a reported loss before tax of £1.2m (2023: loss of £1.4m) and revenues of £15m (2023: £13.8m). It also recorded adjusted EBITDA of £100,000 (2023: EBITDA of £300,000).
Chris Walters, chief executive, said: “The first half of FY24 saw a mixed performance across the group.
“PMC performed well in the period, with much-improved revenue and profitability, underpinned by operational improvements and capital investment. We expect this momentum to continue throughout the second half.
“Performance at CSC was impacted by the deferral of UK defence contract revenues into future years and by operational delays, including unplanned downtime for process-critical equipment in the first quarter.
“Whilst we expect significantly stronger performance from CSC in the second half of the year, the shortfall in first-half performance will not be fully recovered in the second half, while full-year performance will be further impacted by delayed order placement for new hydrogen storage contracts due to the UK general election, now expected later in FY24.”
Order books for both Pressure Technologies divisions underpin the outlook for the group in the second half of FY24, which now expects its full-year FY24 adjusted EBITDA to be not less than £1m.
The group completed the refinancing of its debt facilities in the first half, supported by two of its major shareholders.
It says the previously reported sale process for its PMC division is progressing well. The group has identified a preferred buyer for the division, with a target completion for a deal in August 2024.
Walters noted Pressure Technologies remains well positioned in the emerging market to supply static and mobile hydrogen storage solutions, and to provide inspection, testing and recertification services for these safety-critical systems over the medium and longer term.
He said the group had also been encouraged by Government confirmation that it will provide funding for the development of new hydrogen production, distribution and storage hubs in the next two years, which present “significant opportunities” for CSC over the medium-term.
