PRESSURE Technologies today revealed that weaknesses in global oil prices have led to a tougher business environment.
In a trading update, the board of Pressure Technologies, which is based in Sheffield, said: “As previously reported, the group began the current financial year with a strong order book. However, the caution expressed in the 2014 financial results has proved well founded, as the group’s divisions have experienced a tougher business environment year-to-date.
“The primary cause has been the significant and sustained weakness in the global oil price which has led oil companies to materially reduce capital spending on new projects. Although oil prices have somewhat stabilised in recent weeks, the widely reported marked deterioration in confidence in the sector, has prompted the board to carry out a full review of prospects across the group.
“Whilst the board remains confident of the medium-term opportunities for the group, it considers that expectations for the current financial year should be revised downwards as part of a prudent response to market conditions.”
Commenting on outlook, the statement said: “The board firmly believes that the underlying prospects for the group remain very positive. In the near-term, the low oil price is having an adverse impact on order intake from that sector. This will negatively affect the group’s results for the financial year, in line with the majority of suppliers into the oil industry. Current market conditions mask the group’s strengths in product and service quality, strong customer relationships across all divisions and the prospects for our Alternative Energy Division. The group has a strong balance sheet with low gearing and an increasingly diversified industrial base. This gives a firm base for continued investment through the cycle and allows the continuation of the board’s progressive dividend policy.
“The board has every confidence that as market conditions improve, the group is well placed to take advantage of the opportunities that will inevitably arise.”