Pressure Technologies plc has announced its preliminary results for the full year ended 2nd October 2010, with encouraging signs of recovery in the oil & gas markets and a strong balance sheet maintained.
Although the global economic downturn impacted 2010 sales and profits, the group reflects on a number of key points or encouraging factors in its press statement.
Fully year 2010 saw the transformation of the group through a strategic diversification programme that is well underway, with the acquisition of Al-Met and post year-end, Hydratron. Chesterfield BioGas also successfully completed the first UK biogas to grid project, in another highlight for the group.
While the global economic downturn impacted 2010 sales, operating management and engineering resources strengthened and capital investment and research and development continues, as the Pressure Technologies group invests for the future. Further still, acquisitions and Chesterfield BioGas are expected to show growth in 2011.
And although Chesterfield Special Cylinders is anticipating a difficult first half of 2011 with the recovery of deepwater oil and gas markets delayed by the BP Macondo oil spill, there are signs of an upturn in orders for the second half-year.
Richard Shacklady, Chairman of Pressure Technologies, said, “Overall, we expect the coming six months to be the lowest point in the cycle in shipments to the deepwater offshore oil and gas sector. All key indicators together with recent orders from the sector suggest that this will be followed by a gradual improvement in forward ordering for shipments in 2011/2012.”
“Activity in our Engineered Products Division is expected to continue growing strongly, as we pursue growth into buoyant market segments.”
Revenue for the year ended 2nd October 2010 fell by 17% to £21.7m from £26.2m in 2009. Operating profit reduced from £5m in the previous year to £3.5m. Profit before taxation was £3.5m (2009: £5.1m), giving basic earnings per share of 22.3p (2009: 32.1p).
A continued focus on working capital management is providing the group with a strong balance sheet, allowing it to undertake and fund acquisitions and development programmes from cash flow.
Shacklady continued, “The process of diversification, both organically and through strategic acquisition, is transforming the group. It will emerge better balanced, both in terms of products and markets, and the coming year will see this transformation take further shape. We are seeing a flow of better quality acquisition candidates both in the UK and overseas. Given our strong balance sheet and cash resources, we are well positioned to exploit opportunities as they arise and the board intends to capitalise on those in niche markets.”
“Our dividend policy wholly reflects the board’s confidence in the group, its strategy and ability to flex with prevailing market conditions to secure leading positions in growth sectors of our chosen markets, as well as its confidence in the expected medium term recovery of the deepwater oil and gas business.”