TIDMPRES
RNS Number : 5978T
Pressure Technologies PLC
21 March 2023
21 March 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation (2014/596) which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, ("MAR"), and is disclosed in accordance with the Company's
obligations under Article 17 of MAR. Upon the publication of this
announcement via a Regulatory Information Service, this inside
information will be considered to be in the public domain.
Pressure Technologies plc
("Pressure Technologies", the "Group", or "the Company")
Update on FY22 Audit, AGM Resolutions and Current Trading
Pressure Technologies plc (AIM: PRES), the specialist
engineering group, provides an update on the audit and the
publication of its Annual Report & Accounts for the financial
year ended 1 October 2022 ("FY22 Annual Report"), forthcoming AGM
resolutions, and its current trading.
Audit Update
As part of the ongoing audit process in respect of the financial
year ended 1 October 2022, the Board is now reviewing its
accounting policy and past accounting treatment in respect of a
small number of long-term defence contracts within its Chesterfield
Special Cylinders division ("CSC").
Since FY19, the Group has consistently applied an accounting
treatment whereby revenue for these specific defence contracts was
recognised using an 'Output' methodology under IFRS 15, 'Revenue
from Contracts with Customers' ("IFRS 15"), with costs being
accrued to achieve a uniform profit margin throughout the
multi-year life of the contracts, resulting in cost deferrals at
financial period ends. Whilst this cost treatment impacted the
timing of profit recognition between financial periods, it had no
impact on either the total profitability of the contracts over
their entire lives, nor the quantum or timing of cash flows.
The Company's auditor, Grant Thornton UK LLP ("Grant Thornton"),
has advised the Company that this accounting treatment is not in
compliance with IFRS 15, which requires that all costs incurred in
the period relating to the contract should be immediately expensed.
This means that cost deferral to achieve a uniform contract profit
margin, as historically adopted by the Group, is not permitted.
Subject to final audit confirmation, as a result of a correct
application of IFRS 15, the Group's results for FY22 are now
expected to reflect a GBP1.2 million increase in operating losses
over the GBP1.4 million adjusted operating loss(1) as notified in
the trading update on 15 November 2022. The correct application of
IFRS 15 has also been applied to prior periods FY19, FY20 and FY21.
A restatement of the comparative period FY21 in the FY22 results
will also be required, by which the previously reported operating
loss(2) of GBP0.7 million will increase by GBP0.8 million.
Adjustments made to operating profit or loss in FY19 and FY20 are
individually not material, but do result in a reduction to FY21
opening reserves of GBP0.3 million.
However, as a consequence, there will be a corresponding
increase in operating profits of GBP2.3 million over the remaining
lives of these contracts, the majority of which is expected to be
in FY23 and FY24.
It is emphasised that these accounting adjustments only impact
the timing of profit recognition under these specific contracts.
They do not impact the expected net debt position of the Group as
at 1 October 2022, the future cash generation profile of the Group,
nor the underlying trading or operations of the business.
The Board's expectations for overall Group revenue of
approximately GBP25 million in FY22 remains unchanged and as set
out in the trading update on 15 November 2022.
Publication of FY22 Annual Report
Accordingly, Grant Thornton has advised that they will require
additional time to complete the FY22 audit and, as a result, the
Group is unlikely to publish its FY22 Annual Report ahead of the
Annual General Meeting ("AGM") which is scheduled for 31 March
2023.
In the event that the FY22 Annual Report is not published by 31
March 2023, the Company's ordinary shares will be suspended from
trading on AIM in accordance with AIM Rule 19 with effect from 7.30
a.m. on 3 April 2023, being the first business day after 31 March
2023. Suspension from trading will be lifted with the publication
of the Annual Report, which will be as soon as possible and
currently expected to be no later than the end of April 2023.
Annual General Meeting, Withdrawal of Resolutions
The Company will hold its AGM on Friday 31 March 2023 as
previously announced. However, as a result of the expected delay to
the publication of the FY22 Annual Report, the Board has decided to
withdraw resolution 1 (relating to the approval of the FY22 Annual
Report) and resolution 2 (relating to directors' remuneration) from
the agenda of the AGM.
The withdrawal of resolutions 1 and 2 does not affect the
validity of the Notice of AGM, the proxy form or any proxy votes
already submitted in respect of the remaining resolutions to be
proposed at the AGM. The numbering of all other proposed
resolutions at the AGM remains unchanged. All arrangements for the
AGM are unchanged from those previously notified.
The intention of the Board is that resolutions 1 and 2 will be
the subject of a later General Meeting, which will be held as soon
as reasonably practicable after publication of the FY22 Annual
Report and subject to the notice requirements of the Company.
Trading Update
The Board remains confident in underlying market opportunities
and continues to foresee a return to profitability and positive
cash generation in FY23. The positive outlook for the Group in the
medium and longer term is underpinned by a strong defence order
book and pipeline, as most recently evidenced by the GBP18.2
million contract to supply air pressure vessels for a major UK
naval new construction programme, announced on 6 February 2023.
Also as noted above, compared to previous expectations, the results
for FY23 and FY24 will benefit from a majority of the GBP2.3
million accounting treatment correction in respect of the long-term
defence contracts within CSC.
In addition, the current order book for the Precision Machined
Components division is GBP4.3 million, its highest level since May
2020, with order intake from established international OEM
customers expected to reach at least GBP2 million for the month of
March 2023.
Banking Facility
The Group continues to make progress with the replacement of its
existing Lloyds Bank credit facility(3) with arrangements that
provide greater flexibility and headroom. With support from Ernst
& Young, the refinancing project has now progressed to detailed
conversations with interested lender parties. In the meantime,
Lloyds Bank remains supportive of the Group, which will repay a
further GBP0.5 million of the drawn debt out of existing cash
resources at the end of March 2023, reducing the drawn debt and
facility level to GBP1.9 million. Gross borrowings less cash and
cash equivalents as at the end of February 2023 was GBP0.9
million(4) .
Further announcements will be made in due course as
appropriate.
Notes:
1. Operating loss before amortisation and exceptional
administration charges. The trading update on 15 November 2022
referred to a potential downward impact to FY22 operating loss of
c.GBP0.5 million due to 'FY17 to FY21 contract margin adjustments'.
The correction of contract accounting treatment described in this
announcement has superseded the previously disclosed historic
contract margin adjustments.
2. Operating loss before amortisation, impairments and exceptional administration charges.
3. The current credit facility with Lloyds Bank runs to 31 March 2024.
4. Excludes asset finance leases of GBP1.1 million and
right-of-use asset leases of GBP1.4 million at the end of February
2023.
The person responsible for arranging the release of this
announcement on behalf of Company is Chris Walters, Chief
Executive.
For further information, please contact:
Pressure Technologies plc Tel: 0330 015 0710
Chris Walters, Chief Executive PressureTechnologies@houston.co.uk
Singer Capital Markets (Nomad and Tel: 0207 496 3000
Broker)
Rick Thompson / Asha Chotai
Houston (Financial PR and Investor Tel: 0204 529 0549
Relations)
Kay Larsen / Ben Robinson
COMPANY DESCRIPTION
www.pressuretechnologies.com
With its head office in Sheffield, Pressure Technologies was
founded on its leading market position as a designer and
manufacturer of high-integrity, safety-critical components and
systems serving global supply chains in oil and gas, defence,
industrial and hydrogen energy markets.
The Company has two divisions, Chesterfield Special Cylinders
and Precision Machined Components.
Chesterfield Special Cylinders (CSC) -
www.chesterfieldcylinders.com
-- Chesterfield Special Cylinders, Sheffield, includes CSC
Deutschland GmbH.
Precision Machined Components (PMC) - www.pt-pmc.com
-- Precision Machined Components includes the Al-Met, Roota
Engineering and Martract sites.
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END
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March 21, 2023 03:00 ET (07:00 GMT)
Grafico Azioni Pressure Technologies (AQSE:PRES.GB)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Pressure Technologies (AQSE:PRES.GB)
Storico
Da Gen 2024 a Gen 2025
