Heavy falls in the price of oil see Pressure Tech look to alternative energy arm

Engineer Pressure Technologies has high hopes for its alternative energy division as it expands into new markets following the drastic fall in oil prices which has hit its traditional oil and gas operations.

​The Sheffield-based group said its has a pipeline of £38m in potential orders for biogas upgraders.

Biogas is produced by the anaerobic digestion of organic waste which comes from sources such as landfill sites. 60 per cent of biogas is methane and the rest is largely carbon dioxide.

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Pressure Tech’s chief executive John Hayward said: “The upgrader takes out the biogas and strips out the bits you don’t want. We are selling upgraders to food waste firms, distilleries, landfill sites and farms for them to deal with their organic waste.”

The firm said it now has 99 plants installed worldwide and high hopes for more orders.

The diversification into biogas is all part of Pressure Tech’s expansion into new areas following the oil price fall. Last year revenue from oil and gas made up 73 per cent of the group’s sales but this has been reduced to 59 per cent.

“It would be nice to keep oil and gas at around 60 per cent as the market recovers,” said Mr Hayward.

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He was speaking as the group reported a three per cent rise in revenue to £55.6m in the year to October 3.

Pre-tax profits fell from £5.3m to £580,000 following a number of one off costs, loss-making legacy contracts that were inherited and a difficult year at the group’s engineered products division, which serves the oil and gas market.

The group said the results were slightly ahead of expectations as adjusted operating profit fell 58 per cent to £3.3m.

​It retained its final dividend of 5.60​p, leaving its total dividend for the financial year unchanged at 8.40p.

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​New finance director Joanna Allen said the dividend payment reflects the group’s confidence in the future.​

​My Hayward said that ​the defence operations performed “exceptionally well”.

Pressure Tech is the principle supplier of high pressure cylinders for use on submarines and it supplies NATO and NATO friendly countries with the exception of the US.

“We are trying to get into the US market,” said Mr Hayward.

The group has made 77 people redundant, 20 per cent of its workforce as it battles to overcome the downturn in its core oil and gas market.