Pressure relieved as group puts the worst behind it

The Sheffield-based group fell to a £309,000 pre-tax loss in the 26 weeks to April 2 as the ripples from BP’s oil spill in the Gulf of Mexico continued to dampen appetite for deepwater offshore oil and gas drilling.

Pressure, which makes products including high-pressure cylinders for use in offshore oil rigs, said revenues climbed 6.2 per cent to £10.3m but that was due to the £5.1m sales contribution from its engineered products division, plus £0.9m from its biogas arm.

Chairman Richard Shacklady admitted the results were “disappointing” as sales in its cylinder business more than halved to £4.3m.

However, asked if the figures represent a trough for the group, chief executive John Hayward said: “I hope so... All the signs are there that the market is going to pick up. We are pretty positive going forward.”

Mr Hayward said confidence levels appear to have “bounced back”, judging by an offshore technology conference he attended in Houston in May and inquiries from customers.

He added quotations are at a record high and the group’s order book is recovering, but declined to quantify it.

“It’s certainly significantly higher than it was this time a year ago,” he said.

The group held its interim dividend at 2.4p per share. Pressure’s net cash position was £2.7m, from £5.2m a year ago, after it bought air pressure firm Hydratron.

Mr Hayward said the group continues to look for targets after building its engineered products arm through acquisitions.

But he added Pressure is in no hurry to buy, has ample organic growth to chase, and is wary of using debt.

“The last thing we want to do is hit a bad patch like these six months and end up with the banks crawling over us,” he said.

The group’s biogas arm, which supplies systems to purify gas generated from decomposing waste, has a number of contracts at advanced stages of negotiations. However, Pressure expects revenues from this technology to build from 2012 and beyond.

In time, the group expects the division to generate up to £10m of revenues a year. Shares in Pressure closed down 1p at 177.5p.