Pressure Technologies plc
(“Pressure Technologies”, “the Company” or “the Group”)
2022 Full-Year Results
Pressure Technologies (AIM: PRES), the specialist engineering group, announces its preliminary results for the 52 weeks to 1 October 2022, which are in line with the Group revenue and adjusted operating loss* previously announced by the Company on 21 March 2023.
As announced on 21 March 2023 and on 27 April 2023, the publication of the Company’s Annual Report and Accounts for this period (“FY22 Annual Report”) was delayed due the additional time required by the Company to correct a historic error related to the accounting treatment of certain long-term customer contracts since FY19, and the additional time required by the Company’s auditor to finalise its audit report, which has now been completed. The audited Annual Report and Accounts has been published on the Company’s website and will be posted to shareholders on Wednesday 24 May 2023.
As previously announced, results for the period reflect a £1.2 million increase in operating losses over the £1.4 million adjusted operating loss* notified in the earlier trading update on 15 November 2022, as a net result of correcting the application of IFRS 15 to certain long-term contracts in FY22 and in the prior periods FY19, FY20 and FY21. As a consequence, there will be a corresponding increase in reported profits of £2.3 million over the remaining lives of the relevant contracts in FY23, FY24 and FY25, while contract profitability over the entire duration of the contracts and the quantum and timing of cash flows remain unchanged.
| Financial Results | |
| · | Revenue of £24.9 million (2021: £25.3 million) |
| · | Adjusted operating loss* of £2.6 million (2021: £1.5 million operating loss***) |
| · | Adjusted EBITDA loss** of £0.9 million (2021: £0.1 million EBITDA profit** ***) |
| · | Loss before taxation of £4.0 million (2021: £5.0 million loss before taxation***) |
| · | Basic loss per share of 13.0p (2021: loss per share 14.8p***) |
| · | Net debt**** reduced to £3.5 million (2021: £5.0 million***) |
| * Operating loss excluding amortisation, impairments and other exceptional costs. ** EBITDA profit/loss excluding impairments and other exceptional costs. *** Comparative period financial results for 2021 have been restated. See Note 2 to the financial statements. **** Net debt includes gross borrowings, asset finance leases, right of use asset leases, less cash and cash equivalents. | |
| Group Highlights | |
| · | Difficult trading conditions throughout the FY22 period reflected the challenging economic climate, supply chain disruptions and cost inflationary pressures impacting the Group’s operations, customers and suppliers. |
| · | Progress has continued against strategic priorities, while operational improvements and strengthened management underpin confidence in the outlook for the Group. |
| Chesterfield Special Cylinders | |
| · | Defence revenue increased to £13.5 million (2021: £11.1 million), reflecting the strong order book and new contract placements for submarine and surface ship projects for UK and overseas navies. |
| · | Largest ever contract award of £18.2 million announced in February 2023 to supply safety-critical pressure vessels for major UK naval new construction project, with three-year manufacturing programme to 2025. |
| · | Hydrogen revenue increased to £2.4 million (2021: £2.2 million), while low order intake for refuelling station storage reflected the impact of industry-wide supply chain issues and cost inflation on customer projects. |
| · | Operational improvements in the Sheffield facility are delivering increased capacity and efficiency for hydrogen cylinder and road trailer new build, inspection and testing services. |
| · | Integrity Management revenue increased to £1.8 million (2021: £1.5 million), with strong performance in the first half, largely offset by postponed naval deployments in the second half. |
| · | Enquiry levels for Integrity Management services from offshore services customers increased sharply during the first half of FY23, driven by growing activity in the oil and gas market. |
| Precision Machined Components | |
| · | Revenue increased to £7.3 million (2021: £6.4 million), reflecting the recovery of order intake later than expected in the fourth quarter of FY22. |
| · | Order intake strengthened significantly during the first half of FY23, with order intake of £4.3 million in March 2023, the division’s highest ever monthly order intake. |
| · | Divisional order book of £7.6 million at the end of April 2023 is the highest order book level on record (April 2022: £2.2 million). |
| Strategic Progress | |
| · | Revolving credit facility with Lloyds Bank plc amended in October 2022 and facility term extended to March 2024. |
| · | Review of funding options to replace the Lloyds Bank facility with new, more flexible arrangements continues. Refinancing expected to complete by the end of June 2023. |
| · | Net proceeds of £2.1 million from Placing and Retail Offer in December 2022 to provide short-term working capital, whilst longer term financing options are being progressed. |
| · | Chris Webster, Chief Operating Officer, joined the business in April 2022, providing strong leadership and delivering operational and performance improvements across all sites. |
| · | Steve Hammell, Chief Financial Officer, joined the business on 2 May 2023, bringing considerable financial knowledge and experience from several senior leadership roles. |
| · | Richard Staveley, a representative of Harwood Capital LLP joins the Board as Non-Executive Director on 23 May 2023, bringing considerable investment knowledge and experience. |
| Outlook | |
| · | Strong defence order book and pipeline for high-value naval contracts underpin confidence in FY23 performance for Chesterfield Special Cylinders. |
| · | Opportunities for the supply of new hydrogen storage and demand for hydrogen transportation systems continue to develop, despite delays in the hydrogen energy supply chain. |
| · | Increasing demand for in-situ and factory-based inspection, testing and recertification services for hydrogen static storage and road trailers present exciting growth opportunities. |
| · | Continuing strength of order intake and recovery to modest EBITDA profit for the first half of FY23 underpin the full-year outlook for Precision Machine Components, as order book visibility improves for the first half of FY24. |
| · | Robust order book, strengthened executive team and clear strategic focus underpin medium to long-term opportunities and the Board’s confidence in meeting market expectations for FY23. |