Profits down 90% and share price down 75% in tough year for Pressure Technologies
PRE-TAX profits fell 90% at Pressure Technologies but the group is confident that its acquisition strategy has created a diversified business that can be confident about its future.
Profits in the year to October 3 dropped to £578,000, from £5.35m, while revenue crept up 3% to £55.6m – although this increase was mostly due to the 2015 financial year being a 53-week accounting period.
John Hayward, chief executive of the Sheffield-based group, described it as “another year of great change”.
He said: “Whilst current trading conditions for the majority of our businesses remain challenging, the group is much more diverse and better balanced than in the previous low in the oil and gas market. The board remains confident in the medium to long-term prospects for the group.”
Its exposure to the oil and gas markets has hit its share price hard, which has fallen by 75% since November 2014, when its market value was above £100m. Last night’s closing price of 182p valued the company at £26m.
Pressure Technologies’ chairman Alan Wilson highlighted the value of its acquisition strategy which it has implemented in recent years. In 2010 it bought two businesses, Al-Met and Hydratron, and followed that by taking a 40% stake in Kelley GTM Manufacturing in 2013 and buying three more companies in 2014 – Roota Engineering, Quadscot and Greenlane.
Speaking about its most recent acquisitions, he said: “Interestingly the underlying like-for-like performance of the group, if all the acquired businesses were excluded, would show a fall in revenue of 24.4% and this highlights the positive impact of the strategic decisions taken by the board to diversify revenues and to acquire Roota, Greenlane and Quadscot.”
The group has reduced its workforce by one-fifth over the last year, with 77 people leaving, in part as a consequence of integrating its three purchased companies.
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