Engineer Pressure Technologies reported strong revenue growth thanks to acquisitions and said it is in much better shape to cope with the downturn in the oil and gas market now it has diversified into new areas.
The firm is expanding into the nuclear sector and the biogas market, which benefits from Government incentives
Shares in the Sheffield-based group closed up 6 per cent to 218p on the news that revenue jumped 62 per cent to £32.1m in the six months to March 28.
The group’s chief executive John Hayward said around £10m of the £32.1m turnover stemmed from recent acquisitions, which included the purchase of part of the Greenlane group for up to £12m and the acquisition of Quadscot Precision Engineers for up to £10m, both of which took place last October.
Pressure Tech said the integration of Greenlane Biogas has extended the group’s reach into biogas technology and access to global markets while Quadscot has started to provide in-house precision machining to other parts of the group, thereby reducing external spending. “We are 70 per cent oil and gas and I’d like to reduce that,” said Mr Hayward.
“I can’t say a figure where we’d like it to be. When oil and gas is doing well, it’s the right place to be – it’s a market we need to be in. Over the cycle it’s very profitable.”
The group has seen a fall in sales in its deep-water oil and gas operations after the price of Brent Crude oil fell below $50 a barrel in early January.
As a result major oil companies have reduced their exploration and production spending, with firms such as Royal Dutch Shell and Exxon Mobil turning to asset sales and spending cuts.
The uncertainty has resulted in project postponements, cancellations and requests for price reductions.
Pressure Tech’s overall order book, excluding its alternative energy division, fell 35 per cent since the last financial year end.
The group said underlying operating profits rose 20 per cent to £2.6m.
The group made a pre-tax loss of £500,000 following acquisition and exceptional costs.
The interim dividend was maintained at 2.8p per share, which the board said reflected its confidence in the underlying strength of the group.
Press Tech also announced the appointment of PwC’s Joanna Allen as its new finance director.