30 January 2024
Pressure Technologies plc
(“Pressure Technologies” or “the Company” or “the Group”)
2023 Full-Year Results
Pressure Technologies plc (AIM: PRES), the specialist engineering group, is pleased to announce its audited results for the 52 weeks to 30 September 2023 (“FY23”), which are in line with the Group revenue and Adjusted EBITDA1 previously announced by the Company on 3 October 2023.
The audited Annual Report and Financial Statements will be published on the Company’s website today.
| Financial Highlights● Group revenue increased 29% to £32.0 million (2022: £24.9 million) ● Gross profit up 68% to £8.9 million at 28% margin (2022: £5.3 million at 21% margin) ● Adjusted EBITDA1 of £2.1 million (2022: Adjusted EBITDA loss of £0.9 million) ● Adjusted operating profit2 of £0.6 million (2022: adjusted loss of £2.6 million) ● Reported loss before tax of £1.1 million (2022: loss of £4.0 million) ● Reported basic loss per share of 1.8p (2022: loss per share of 13.0p) and Adjusted basic earnings per share3 of 0.8p (2022: loss per share of 10.2p) ● Net debt4 of £2.4 million (2022: £3.5 million); Net bank borrowings, excluding asset finance lease liabilities and right of use asset lease liabilities, of £nil (2022: £0.6 million) |
| 1 Adjusted EBITDA is earnings / loss before interest, tax, depreciation, amortisation and other exceptional costs2 Adjusted operating profit / loss is operating profit/loss before amortisation and other exceptional costs3 Adjusted basic earnings / loss per share is reported earnings per share before amortisation and other exceptional costs4 Net debt comprises cash and cash equivalents, bank borrowings, asset finance lease liabilities and right of use asset lease liabilities |
Group Highlights
| ● | FY23 has been a year of significant progress for the Group with market conditions and order intake improving considerably alongside delivery of operational improvements, facilitating a return to profitability in both divisions. |
| ● | Group revenue in FY23 of £32.0 million (2022: £24.9 million), representing like-for-like growth of 29% and underpinning a return to Adjusted EBITDA profitability of £2.1 million (2022: loss of £0.9 million). |
| ● | Order intake of £43.0 million in FY23 (2022: £24.6 million) was 75% higher than prior year and supported a year-end order book of £20.7 million (2022: £10.4 million), the highest level for more than five years. |
| ● | Having considered the improved trading environment and outlook for the PMC division, the Board decided to realise value through the divestment of PMC. The Group has appointed advisors to handle the sale process which was launched in December 2023. |
| ● | The proceeds of the sale of PMC are intended to repay the new Term Loan facility and fund strategic investment opportunities at CSC to support its growth in the hydrogen energy sector. |
| ● | Bank borrowings were reduced by £1.5 million in the year to £0.9 million (2022: £2.4 million), facilitated by the improved trading performance and a fundraising of £2.1 million (net of expenses) in December 2022. |
| ● | Subsequent to the year-end, in November 2023, the Group refinanced its existing debt facilities with Lloyds Bank by arranging a new Term Loan facility of £1.5 million with Rockwood Strategic plc and Peter Gyllenhammar AB, two of its major shareholders. The new Term Loan facility provides a financing bridge to the sale of PMC and is repayable upon a successful sale of the division. |
Chesterfield Special Cylinders (“CSC”)
| ● | CSC revenue FY23 of £20.7 million (2022: £17.6 million), driven by defence work, including the major naval contract won in February 2023, underpinning improved margin performance and a significant increase in divisional Adjusted EBITDA to £3.9 million (2022: £1.1 million). |
| ● | Defence revenue of £17.2 million (2022: £13.5 million), reflecting 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 programme over three years to 2025. |
| ● | Hydrogen revenue was subdued at £2.1 million (2022: £2.4 million) due to broader industry supply chain constraints and was driven equally by sales of new refuelling station storage solutions and periodic inspection, testing and recertification services for hydrogen road trailers. |
| ● | Enquiry levels for Integrity Management services increased sharply during FY23, driven by growing activity in the offshore and hydrogen energy markets. Subsequent to year-end, CSC has commenced work on a significant Integrity Management contract for a major defence customer. |
| ● | CSC order intake in FY23 of £24.6 million (2022: £15.7 million) supports a year-end order book of £11.3 million (2022: £7.4 million), providing good revenue visibility into FY24. |
| ● | Operational improvements in the Sheffield facility are delivering increased capacity and efficiency for hydrogen cylinder and road trailer new build, inspection and testing services. |
Precision Machined Components (“PMC”)
| ● | PMC revenue in FY23 of £11.3 million (2022: £7.3 million), reflecting strong recovery in the oil and gas market. |
| ● | PMC returned to profitability in the year with divisional Adjusted EBITDA in FY23 of £0.1 million (2022: loss of £0.3 million). |
| ● | PMC order intake strengthened significantly in FY23 and reached £18.4 million for the year (2022: £8.9 million), an increase of over 100%, supporting a year-end order book of £9.4 million (2022: £3.0 million), the highest order book level seen in the last five years, providing strong revenue cover into FY24. |
| ● | Major customers of PMC have continued to report increased activity levels during the first quarter of FY24. |
Outlook
| ● | CSC will continue to focus on delivery of current high-value defence contract milestones during the financial year ending 30 September 2024 (“FY24”) and expects to pass the peak of activity on these contracts in the third quarter. |
| ● | CSC then expects to re-balance its revenue profile across UK defence programmes, global defence programmes and the hydrogen energy market in the second half of FY24, with each of these markets presenting significant opportunities over the medium-term. |
| ● | During this transitional period, CSC revenue is expected to decline slightly on FY23 levels with a consequent reduction in divisional profitability in FY24. |
| ● | Despite delays in the broader hydrogen supply chain, CSC is well positioned to secure several identified projects in FY24 and remains positive about its prospects in the hydrogen energy market for new build storage and transport solutions and for the through-life inspection, testing and recertification of hydrogen systems over the medium and longer term. |
| ● | The announcement by UK Government in December 2023 of £90 million of funding for 11 new hydrogen projects as part of the first Hydrogen Allocation Round (HAR1) is a positive development providing opportunities for CSC over the next 2 years. |
| ● | Further improvement of financial performance in PMC is expected based on the strong order book and improving operational performance. |
| ● | Given these divisional trends, the Board expects the Group’s full-year FY24* revenue and Adjusted EBITDA to be in-line with current market expectations (revenue of £34 million and Adjusted EBITDA of £2.1 million). * FY24 outlook includes CSC and PMC, on the basis that PMC is not sold in FY24 and remains a continuing operation |
Chris Walters, Chief Executive of Pressure Technologies plc, commented:
“Significantly improved performance in 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 £18.2 million 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 into FY24.
Despite delays in the hydrogen energy supply chain over the past year, we remain well positioned in this emerging market to supply static and mobile hydrogen storage solutions, and to provide the through-life inspection, testing and recertification services for these safety-critical systems over the medium and longer term. The announcement in December 2023 by UK Government of the first Hydrogen Allocation Round is positive for the market and presents opportunities for CSC over the next two years.
In Precision Machined Components, the recovery of order intake levels was very strong in the year facilitating a return to profitability for the division. In light of these improving conditions, the Board decided to divest PMC and launched the sale process in December 2023. We are targeting completion of the sale in the third quarter of FY24, with the sale proceeds to be used to repay the new term loan recently arranged with two of our major shareholders and to fund the development of CSC in the hydrogen energy market.
We have a clear focus on shareholder value and the delivery of strategic objectives for the Group in FY24.”
Annual General Meeting
The Annual General Meeting of the Company will take place on Thursday 21 March 2024 at 09:30 am at the offices of Singer Capital Markets, 1 Bartholomew Lane, London EC2N 2AX.
Notice of FY24 Interim Results
The Company expects to publish its unaudited interim results for the half year ending 30 March 2024 by the end of May 2024.
For further information, please contact:
| Pressure Technologies plc Chris Walters, Chief Executive Steve Hammell, Chief Financial Officer | Tel: 0333 015 0710company.secretary@pressuretechnologies.co.uk |
| Singer Capital Markets (Nomad and Broker) Rick Thompson / Asha Chotai | Tel: 0207 496 3000 |