Pressure Tech's shares leap on bullish future prospects

The company's shares leapt 17 per cent to 155.5p on the news.The Sheffield-based group said it had faced very challenging oil and gas markets over the past three years. It reacted to these unprecedented market conditions by reducing its headcount by 40 per cent, but said it has been careful to protect its knowledge and skills base, to be well positioned for increased demand when it arrives. The headcount reduction programme resulted in the loss of 150 jobs over the past three years and the group believes this process is largely completed.The group reported a pre-tax loss of £1.9m in the year to September 30, up from a £400,000 loss the previous year.'‹ The loss was due to amortisation on acquisitions and the cost of redundancies. The group made an adjusted operating profit of £1.1m, up from a loss of £400,000 the previous year.Revenue rose '‹7 per cent to £38.4m.The firm said t'‹he level of optimism within the oil and gas market is increasing by the month. '‹It said m'‹ajor oil companies reported healthy profits for '‹the third quarter of 2017, which is a sure sign that their attentions will start to move towards investment and growth. It said it was encouraged by recent assurances from OPEC that production cuts will be sustained until supply and demand has been re-balanced.John Hayward, CEO of Pressure Technologies, said: "There is a lot more confidence in the oil and gas market and we saw a significant pick up in the second half. That has continued into the first quarter of the current year and we are recruiting in that division."Whilst the oil and gas market has been in the doldrums, '‹Pressure Technologies said it has been busy pursuing other industrial sectors. '‹It believes the biogas market offer'‹s'‹ substantial potential, but '‹the market '‹has been '‹"'‹frustratingly slow'‹"'‹ to deliver'‹. Despite this the group said it is committed to building on '‹its '‹position as the market leader. '‹It said its market leadership in large high-pressure cylinders maintains '‹its'‹ enviable position as the company of choice for many of the world's navies and air forces.The group said r'‹enewable energy is becoming more topical amongst the public at large and governments are making bold statements about moving away from carbon-based fuel sources. It said that w'‹hether these ambitious political statements are achievable remains to be seen, '‹but the general increase in awareness of what renewable energy has to offer is helpful. '‹It believes the potential market for biogas is enormous and '‹it is confident it will materialise and offer substantial opportunities for increasing sales and profits.'‹It is working on the design of cylinders for the Dreadnought-class of nuclear-powered submarines for the UK Ministry of Defence, which '‹will offer a visible order pipeline for some years ahead'‹. T'‹he Dreadnought class submarine'‹ is'‹ Trident's successor. The group's Alternative Energy division'‹ designs equipment used to upgrade '‹biogas '‹('‹produced by the anaerobic digestion of organic waste'‹)'‹ into high-quality methane, which is suitable either for injection into the gas grid, or used as vehicle fuel. It trades under the name of Greenlane'‹.Against a backdrop of a further reorganisation, the '‹d'‹ivision broke'‹ '‹even, on an adjusted basis, for the first time since the acquisition of Greenlane. During the first'‹ '‹half of the year'‹ the group conducted'‹ a full review of the management structure and effectiveness. Sales and engineering support are '‹now r'‹egionally based with Vancouver covering the Americas and China'‹ whilst'‹ Sheffield will be responsible for Europe, Africa and Asia. The '‹division's '‹closing order book at '‹the '‹year end was £5'‹m, '‹down from £14'‹m at the end of 2016. '‹"'‹The significant pipeline of good quality sales opportunities proved frustratingly slow to convert to orders, partly due to the disruptive effect of the reorganisation, but in the main external factors were the root cause'‹," said Mr Hayward'‹. '‹"'‹In the UK, a proposed change to the Renewable Heat Incentive, which favoured biogas upgrading, was initially delayed by a drafting error in the legislation, then further delayed by the '‹G'‹eneral '‹E'‹lection and is now expected at the end of the first quarter of calendar year 2018.'‹"The firm expects all divisions to be profitable this year.