Pressure Technologies Share Discussion Threads

[nurdin] 02/10/2014 11:51

Nice write up in Investors Champion..

'As a result of the acquisition the house broker has revised their normalised PBT forecasts from £8.4m and £10.1m to £9.8m and £11.8m for Financial Years ending September 2015 and 2016 respectively. The house broker has also pointed out that, as a result of both acquisitions and better than expected organic growth, their 2016 forecast has now more than doubled from the £5.6m forecast at the start of this calendar year..'

[revoman] 02/10/2014 10:09

"We have increased our FY15 and FY16 normalised EPS forecasts by 16% to 54.1p and 65.4p. Prospective PERs to September 2015 and 2016 are now just 12.1x and 10x, which in our view significantly undervalue the Group and its prospects". I assume you can read...

[davidosh] 02/10/2014 10:08

Just to let you all know that John Hayward and Pressure Tech will be presenting to investors on Friday 7th November and have a stand for the whole day during the three day Mello2014 investor show in Derby Conference Centre. See www.mello2014.com

You are all very welcome to join the hundreds of investors attending and the list of keynote speakers has been acclaimed as the best ever at an investor conference. www.mello2014.com

[pj 1] 02/10/2014 10:06

No at my PC, what roughly will 2016 P/E be?

Tia PJ

[revoman] 02/10/2014 10:03

I particularly like this line: "Factually, our FY16 forecast has now more than doubled from the £5.6m forecast at the start of this calendar year." Marvellous.

[rcturner2] 02/10/2014 10:01

If those eps forecasts are accurate this will rerate significantly once they demonstrate that level of earnings growth.

[scottishfield] 02/10/2014 09:55

very useful, tks revoman

[revoman] 02/10/2014 09:31

Broker comment:

Pressure Technologies has announced the earnings enhancing acquisition of Quadscot for an initial consideration of £7.3m and also new bank facilities that total up to £25m. We believe the acquisition to be an excellent fit with the Group’s existing businesses, Al-Met and Roota Engineering. Quadscot is profitable and cash generative, and it has good near term order visibility. There are also significant opportunities, as part of the Group, to further expand and extend Quadscot’s customer base, following a recent large scale expansion of its manufacturing facility. We have increased our FY15 and FY16 normalised EPS forecasts by 16% to 54.1p and 65.4p. Prospective PERs to September 2015 and 2016 are now just 12.1x and 10x, which in our view significantly undervalue the Group and its prospects. We have increased our price target from 725p to 760p.

Quadscot has a long established blue chip customer base and the majority of its bespoke products relate to exploration and monitoring equipment used in the sub-sea oil and gas industry. It is a well invested business with high quality engineering equipment able to work on a wide variety of materials that include nickel alloys, stainless and carbon steels, titanium and plastics.

Opportunities exist to leverage Quadscot’s reputation and its recently expanded manufacturing facility. Cross selling opportunities with Roota and Al-Met will be targeted in due course and management see Quadscot as an obvious strategic fit.

The announcement notes that in the year to September 2014, Quadscot will report a significant uplift on both prior year revenues and profit before tax that were reported at £4.5m and £1.0m respectively.

The maximum consideration is £10.3m, with £3m of deferred consideration split over two years, depending upon Quadscot’s EBITDA performance. The maximum consideration is payable on an EBITDA of £2.25m, implying a probable EV/EBITDA multiple of 4.6x.

At Group level, we have revised our normalised PBT forecasts from £8.4m and £10.1m to £9.8m and £11.8m for FY15 and FY16 respectively. Factually, our FY16 forecast has now more than doubled from the £5.6m forecast at the start of this calendar year. This progress has been the result of both acquisitions and better than expected organic growth.

New bank facilities have been agreed with Bank of Scotland. The Group now has a £15m multi-currency revolving credit facility running to 2018 and an accordion facility that allows the total revolving credit facility to increase to £25m.

[scottishfield] 01/10/2014 16:28

good day here today.

[pyemckay] 01/10/2014 12:35

lol, i was surprised at the buy out price as they didnt seem that big a company all those years ago. Bob certainly Can and the numbers seem to suggest this is a decent little company.

[revoman] 01/10/2014 10:36

Or a bit of a cant?

[cockerhoop] 01/10/2014 09:59

Pyemckay,

And your impression of them? Is Bob a can-do sort of guy! LOL :-)

[pyemckay] 01/10/2014 09:17

quadscot and Bob Cant were people I used to deal with 15-20 years ago in precision electronic manufacturing. I never thought our paths would cross again, lol.

[scottishfield] 01/10/2014 09:11

Yes, 2 v good news items.

[cockerhoop] 01/10/2014 08:34

I think it's another reasonably priced high quality acquisition with better margins than the existing company (as was Roota). Continues the reduction in reliance of the original cylinder business which is very competitive with the South Koreans squeezing margins.

[coppertrader] 01/10/2014 08:05

Nice little line in the rns stating that it will be immidiately earnings enhancing, although i did like that we were debt free.

[scottishfield] 24/9/2014 13:57

little topup here for me.

[rcturner2] 24/9/2014 12:46

Just to remind all holders of the interim results:

Financial highlights:

-- Strong growth:
-- Revenue of GBP19.9 million (2013: GBP16.4 million) - up 21%
-- Underlying operating profit* at GBP2.17 million (2013: GBP1.42 million) - up 53%
-- Underlying earnings per share* of 12.7p (2013: 9.2p) - up 38%
-- Interim dividend increased to 2.8p per share (2013: 2.6p) - up 8%
-- Net cash of GBP10.5 million, supported by strong trading and an oversubscribed fundraising

[shanklin] 18/9/2014 10:19

d2a,

I think we agree. The main point I was intending to make is that, in terms of the initial consideration, no or very few shares are likely to be issued.

[deucetoace] 18/9/2014 10:17

There's very little financial consideration to the vendors I agree but they will still have to pay money to in effect shore up the balance sheet by paying outstanding creditors. Also they are holding the £1.2 million to offset potential cost overruns so also improving the balance sheet. It looks to me that most of this £6m this will be paid out to someone.

[shanklin] 18/9/2014 09:42

It sound like they have bought good technology but a financial sh1tshow, so it would not surprise me if there is no initial consideration to pay whether in cash or shares. Even if they do, it is going to be minimal as the maximum initial consideration is down to £1.2m and there may be further deductions from that.

[james188] 18/9/2014 09:38

They had to do something about the Alternative Energy Division; it was a real minnow compared to the other two divisions and completely out of sync. The share price dropped yesterday (I took the opportunity to top up), so some people clearly knew what was coming. It has dropped slightly more this morning and I have added some more. I wouldn't be at all surprised if further shares are issued in due course, notwithstanding the statement that the initial acquisition cost will be funded out of existing cash resources.

[cockerhoop] 18/9/2014 08:22

Lots of details of the acquisition - appears reading between the lines that although Greenlane has decent IP and products it's a financial mess (possibly at the mercy of it's creditors)
i.e. No audited accounts for 2012 or 2013!
I imagine it will take a fair bit of management time to turnaround but if Greenlane hits it's EBITDA target over the next 4 years it'll be a bargain.

[m.t.glass] 18/9/2014 08:03

I take some comfort from the fact that the two companies have worked closely together for several years, and know each other well. If it were not for that, I would be uncomfortable with this rebalancing of PT's focus.