Pressure Technologies posts operating loss in challenging year

The results will be studied closely by City analysts

Pressure Technologies has announced its preliminary results for the 53 weeks to 3 October 2020.

Revenue over the period was £25.4 million, compared with £28.3 million the previous year. The company posted an adjusted operating loss of £2.4 million. In 2019, the company delivered a £2.2 million operating profit.

Pressure Technologies said the fall in group revenue reflected the challenging trading conditions, Covid-19 disruption and the deferral of a major defence contract into the first quarter of this financial year.

The company said the adjusted operating loss was driven by lower than expected gross margins in both divisions, the deferral of the defence contract revenue in Chesterfield Special Cylinders (CSC) and poor operational performance in Precision Machined Components (PMC)

Chris Walters, chief executive of Pressure Technologies commented: “Whilst these results reflect an extraordinarily challenging year, the operational changes and strategic progress made since 2019 put the group in a stronger position to face the impact of the Covid-19 pandemic and depressed oil and gas market throughout FY20. I would like to thank all our employees for their continued hard work and commitment through this period.

"We anticipate at least a further year of similarly challenging conditions in the oil and gas market, but the consolidation of sites, operational improvements, diversification of the customer base and new long-term strategic supply agreements position the Precision Machined Components division well for a return to profitability when market conditions recover.

"Following a well-supported fundraising, we now have the balance sheet strength and resources to capitalise on the significant growth prospects for Chesterfield Special Cylinders in the hydrogen energy market and to accelerate growth in our Integrity Management services business.

"First-quarter trading was in line with management expectations and we were delighted to secure five new hydrogen refuelling station contracts in December from a growing pipeline of opportunities with new and established customers.

"Whilst we remain cautious regarding oil and gas market conditions, the increasing momentum in hydrogen and the strong orderbook for defence and nuclear customers underpin the board’s confidence in the outlook for 2021 and beyond.”

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