Acquisition for Pressure Technologies but profits could be hit

The Sheffield company, whose high-pressure cylinders are used in sectors including defence, shipping, aviation and deep-sea oil and gas, said it had acquired Al-Met, a niche manufacturer of specialised, precision engineered valve wear parts used in the oil and gas industries.

It comes as Pressure Technologies said its main subsidiary, Chesterfield Special Cylinders, had won the expected level of orders from its major customers but had seen "some slowing" in converting prospects into orders for oil and gas support services projects.

The Al-Met deal is worth up to 2.25m, Pressure Technologies said, with the initial 2m paid subject to adjustment.

Al-Met's products are used in high-pressure choke and flow control valves, designed to regulate flow volumes in extremely demanding applications in the subsea and surface oil and gas industries.

Pressure Technologies said the 4.2m turnover business, which was set up in 1985, has developed a "leading edge" capability in precision machining carbides and superalloy matrix materials.

"The ability to combine high alloy steels with tungsten carbide inserts and specialised coatings gives Al-Met its niche position with its customers, global wellhead and subsea equipment OEMs."

Al-Met, based at a single production site in Pontyclun, near Cardiff, and has 29 staff, including 20 highly-trained machinists. Tony Chess, the director and general manager, and his management team will remain with the business.

Today the firm said it was being hit by spending delays among customers.

Pressure Technologies said: "We believe that spending delays on these projects are mainly due to customer indecision in setting technical specifications and continuing economic uncertainty."

It could still convert enough orders to achieve market forecasts for the 12 months to October 2 this year, it said, but pre-tax profit could be is likely to be up to 900,000 lower than market expectations, because of order delays.

The firm said it would have a clearer view by mid-April. All other areas of the business continue to perform in line with market expectations, it added, and it is confident activity will return to more normal levels in 2011.

It is cutting operating costs to maintain CSC's margins.