Notice of Results and Trading Update

RNS Number : 3150F

Pressure Technologies PLC

21 April 2011

 



Notice of Results and Trading Update

Pressure Technologies plc ("Pressure Technologies" or the "Group") announces that its interim results for the six month period to 2 April 2011 will be issued on Tuesday, 14 June 2011.

The Group also issues the following trading update in advance of the announcement of the interim results:

Cylinders

Chesterfield Special Cylinders ("CSC") has started to see an increase in activity in its principal market, deep water oil rigs and drillships. However, this increase has been slower than previously anticipated and will have an adverse effect on 2011 profits as the lead times of quoted projects now extend beyond the end of this financial year and stock build in the fourth quarter will be lower than expected. Early indications suggest that the CSC division will continue to perform at a similar level in 2012. Any improvements from the recovery of the ultra-large cylinder deep sea oil rig market will be offset by a reduction in the higher margin defence naval sales in 2012 as the next major deliveries into this market are scheduled for 2013.

There has been progress in a number of areas. CSC has successfully obtained Civil Aviation Authority ("CAA") approvals to enter the civil aerospace support service market for refurbishment and retesting.  We were instrumental in the creation of a British Standard for in-situ testing of ultra-large cylinders and are currently seeking to extend this into an International Standard.  These activities will not affect the current year's results but are expected to have a positive impact in 2012.  Our groundbreaking aviation composites are also on track to secure sales in 2013.

Engineered Products Division

Our Engineered Products Division is performing in line with expectations. This division supplies into the wider oil and gas sector, where strong levels of demand are being experienced, and further strengthening is anticipated into 2012 and beyond. This is driving increases in business at both Al-Met and Hydratron. As previously reported, Hydratron relocated its UK business onto one site during the first quarter of the current financial year and the benefits of this relocation are now starting to be realised. The Board believes that growth will continue across this division as a whole through the second half year and into 2012.

BioGas

Two critical milestones were achieved in our Chesterfield BioGas division ("CBG") at the end of the first half of the financial year. In early March, the Government set the Renewable Heat Incentive for biomethane combustion or injection at a competitive 6.5p per kWh. This was ahead of our expectations and we have seen a significant increase in interest in our offering for the upgrade of biogas for injection into the gas grid. Allied to this, on 31 March 2011, CBG extended its current licence to market and manufacture Greenlane® biogas upgrade equipment in the UK and Eire in perpetuity for £800,000. This has firmly cemented the business for the long term in the UK market where CBG already has a favourable reputation having supplied the UK's first gas to grid upgrade equipment at Didcot in September 2010. A number of major utility companies are in discussion with CBG regarding upgrade and injection into the gas grid. The potential size of these projects is significant and we expect substantial growth in sales in 2012. The only disappointment is that delays in announcing the Renewable Heat Incentive mean that any orders we now receive cannot be delivered in this financial year and this division is therefore unlikely to breakeven this year as we had previously expected.

The division also manufactures a range of compressed natural gas filling stations and trailers. During the first half year, CBG has successfully supplied two compressed natural gas filling stations, as well as a biogas trailer. 

The markets supplied to by CBG are completely under-developed in the UK; CBG is selling technology that has been proved in major installations around the world and, for these reasons, the Board remains confident that CBG will become a significant part of the Group in the medium term.

Summary

The Board believes that the Group is likely to deliver results below expectations for the year ending 1 October 2011. Growth in 2012 will come principally from our Engineered Products Division and our biogas operations, with growth in CSC not expected to come through until later in the year when the deep water oil rig market firms up.

For further information, please contact:

Pressure Technologies plc John Hayward, Chief Executive James Lister, Group Finance Director	Tel: [phone] www.pressuretechnologies.co.uk
Fairfax IS PLC Nominated Adviser and Broker Ewan Leggat/Laura Littley	Tel: [phone]
Rawlings Financial PR Limited Catriona Valentine	Tel: [phone] www.rawlingsfinancial.co.uk

Company description:

Pressure Technologies is an AIM listed, leading designer and manufacturer of speciality engineering solutions for high pressure systems serving large global markets.

The Group's largest subsidiary, Chesterfield Special Cylinders Limited ("CSC") designs, manufactures and offers retesting and refurbishment services for a range of speciality high pressure, seamless steel gas cylinders for global energy and defence markets. The business is conducted under the "Chesterfield" brand which is a long established name in the cylinders and specialised pressure vessel market.

Chesterfield BioGas Limited was formed in November 2008 following the signing of a co-operation agreement with Greenlane® Biogas Limited, the world leader in biogas upgrading. This gives Pressure Technologies exclusive rights to market and manufacture Greenlane® equipment in the UK and Eire. Chesterfield BioGas provides turnkey solutions for the cleaning, storage and dispensing of biomethane for injection into the gas grid or use as a vehicle fuel.

In 2010, the Engineered Products Division was formed following the purchase of Al-Met Limited ("Al-Met") and the Hydratron group of companies ("Hydratron").

Al-Met is a niche manufacturer of specialised, precision engineered valve wear parts used in the oil and gas industries, which was acquired by Pressure Technologies in February 2010. Its products are used in high-pressure choke and flow control valves, designed to regulate flow volumes in extremely demanding applications in the subsea and surface oil and gas industries. The business, which was established in 1985, has developed a leading edge capability in precision machining carbides, high grade stainless steels and super alloys.

Hydratron acquired on 15 October 2010, designs, manufactures and sells a range of air operated high pressure hydraulic pumps, gas boosters, power packs, hydraulic control panels and test rigs. Hydratron has sales and manufacturing companies in Altrincham, UK, and Houston, USA and a spread of third party distributors in key locations around the world. Formed in 1981, Hydratron has since established itself as a leading supplier of quality high pressure equipment to the oil and gas industries. The full range of Hydratron products may be viewed at www.hydratron.co.uk.

 

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