Yorkshire-based Pressure Technologies completes debt refinancing deal as firm returns to profit

Sheffield-based specialist engineering firm Pressure Technologies has announced that it has completed the debt refinancing and grant of warrants for a new term loan facility of £1.5 million.

The facility has been utilised to repay an outstanding bank loan of approximately £0.9 million to Lloyds Banking Group, to settle transaction costs and to provide additional working capital headroom.

The Company formally executed legal documentation on the refinancing with Rockwood Strategic plc, and Peter Gyllenhammar AB, both major shareholders in the company.

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Pressure Technologies also announced last month that it was to sell its Precision Machined Components divison.

Chris Walters, chief executive of Pressure Technologies plc. Picture by Simon Dewhurst.Chris Walters, chief executive of Pressure Technologies plc. Picture by Simon Dewhurst.
Chris Walters, chief executive of Pressure Technologies plc. Picture by Simon Dewhurst.

Chris Walters, chief executive of Pressure Technologies plc, commented: "We are delighted to have completed the refinancing with the support of two of our major shareholders. Our new Facility will enable us to further develop the business whilst we realise value from the sale of the Precision Machined Components division."

The Lloyds loan was secured against the assets of the group and was due to be repaid in full on 31 December 2023, at which point the facility will expire. The finance leases are secured against specific assets belonging to the group, and have a range of expiry dates over the next 4 years.

Richard Staveley, non-executive director of Pressure Technologies plc and fund manager of Rockwood Strategic plc, said: "Constructively engaging with Pressure Technologies has led to us providing this loan, alongside Peter Gyllenhammar AB, another major shareholder, to support the Company through to the planned divestment of the Precision Machined Components division, which we believe will unlock shareholder value.”

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During 2023, the Pressure Technologies said it had explored refinancing the Lloyds loan with a number of mainstream lenders and challenger banks by way of raising new asset-backed lending facilities secured against the property assets, plant and debtors of the group.

However, it noted that the challenging trading conditions experienced across 2022 and during the early part of 2023 subdued the financial performance of the group in that period.

Whilst profitability for the financial year ended 30 September 2023 reflected materially improved trading on the prior year, with revenue up 28 per cent to £32 million, it is expected to remain at this level in the next 12 months.

As a result, and alongside tightening lending standards and credit availability, the group said its debt capacity had been restricted and a suitable mainstream lending facility had not been made available.

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The group also announced last month that it expected to see a return to profitability in its latest full-year results.

Pressure Technologies said its expected EBITDA for the full year would fall at £2 million, up from a loss of 0.9 million the year prior.

The group was also able to lower its net debt from £3.5 million to £2.4 million. It also saw its order intake rise from 25 to 43.