Pressure Technologies
HOLDSheffield-based Pressure Technologies is showcasing its resilience amid a recent weakening in key markets.
The company’s core CSC business makes, designs and refurbishes specialist high-pressure cylinders used in the offshore oil and gas and defence markets. Meanwhile, Pressure Technologies is investing in a new division, CBG, through which it will deliver solutions for cleaning, storing and dispensing biomethane, produced from waste water treatment and anaerobic digestion of organic waste and which can be used as a clean vehicle fuel or injected into the national gas grid.
Annual numbers to 3 October proved reassuringly robust, with sales growing more than 10% to £26.2m, despite the effect of last year’s oil price dip on demand patterns in Pressure's largest sector, oil and gas. Investment in CBG masked profit gains in the CSC division, constraining operating profit growth to a modest rise from £4.9m to £5m, with pre-tax profits edging up to £5.1m (2008: £5m). Encouragingly, following a year of strong cash generation, net cash balances increased to £7.9m (2008: £5.9m) and the dividend was lifted 10% to 6.6p.
Despite a recent recessionary blip, Pressure Technologies’ medium-to-long-term prospects in the oil and gas industry remain strong and short-term, it is benefiting from resilience in the replacement cylinders, naval defence and aircraft cylinder markets.
Forecasting a return to strong organic growth in 2011, Pressure Technologies, recommended by Growth Company Investor at 250p in February 2009, is also pursuing realistically priced acquisitions, in order to diversify its business. On that basis, its shares are well worth holding onto.
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Market cap: £27.2m
Share price: 240p
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