Pressure Technologies Share Discussion Threads

[40 fathoms] 30/1/2024 12:58

The annual report is worth a read.

In terms of the expectations for the future order book I have pulled out the following.

"CSC are also currently in discussions for future global naval contracts which could support manufacturing activity for these products to 2040 and beyond."

"The US Columbia-class and Virginia-class programmes are active and involve the use of UK approved supply chain."

"CSC is making significant progress with framework purchase agreements with new customers to support collaboration on the development of efficient and cost-effective storage solutions" (Hydrogen)

"Demand for steel tube trailer new construction, refurbishment and recertification increased steadily during 2023 and this area is expected to grow further during 2024 due to increasing demand for bulk hydrogen transportation"

"CSC has developed commercial relationships with a number of the new UK projects that will receive HAR1 funding in the period to 2025 providing a pipeline of opportunities for the next two years."

[mr roper] 30/1/2024 09:04

Decent update today. Staveley looks to be bringing some excellent focus to the bod. Turnaround looks to be underway

[baner] 30/1/2024 08:32

Break up value should be well north of 50p/share. Central costs absolutely horrendous - how can the BOD accept this? Huge potential surplus value in the Sheffield property - fantastic location. Good to see mr Staveley now a director - First Class investor who will look after the best interest of all shareholders no doubt. Very sound risk/reward offered at prevailing share price.

[cerrito] 30/1/2024 07:59

At first glance nothing to get excited about.
Adjusted ebitda at PMC minimal,although I note the explanation on Almet. Peak defence revenue this FY for CSC and hydrogen slow.
No IMC type event.
Nothing of note seems to have happened since october 1 last apart from the Lloyds exit.
Continue to ask myself how feasible to sell PMC and once sold what will happen to the central costs.
Hope that you all and the market are more upbeat than me.

[darrin1471] 17/1/2024 21:03

Hydrogen delays.
James Cropper: LSE:CRPR
"At the time of the Interim Results, the Group noted that it was scaling additional capacity for its Future Energy hydrogen offer and investing in the next phase of expansion in UK electrolyser manufacturing operations to position the Advanced Materials business to benefit from growing demand in these markets. However, since the announcement of the Group's Interim Results, the Advanced Materials business has seen expected projects in hydrogen being delayed, partly as a result of inflation and higher interest rates feeding through to higher project costs. In addition, funding decisions by governments have impacted end customer project plans and scheduling. As a result, customer expansion plans saw a noticeable change with major market growth now expected to be pushed back to calendar years 2026 to 2028."

[40 fathoms] 03/1/2024 07:43

Yesterday they posted the Interim results presentation to the website, it is a bit late (about 5 months) but packed full of information



In particular I liked this bit on page 10, which I had not seen before.

"Qualification process for GDEB (US Defence prime) is progressing on-track for Mar ‘24"

This is General Dynamics Electric Boat and they are building the Columbia class and the SSN(X)/Improved Virginia class (The SSN-AUKUS class "will have a high degree of commonality" with the Virginia-class, including "sharing elements of the propulsion plant, combat system and weapons")

[darrin1471] 30/12/2023 12:49

A 98 page terms and conditions document for a £800k over 4 years MOD contract

[40 fathoms] 29/12/2023 23:48

A new MOD contract awarded in October and published this month for £797,500 over 4 years for the supply of portable fire extinguishers. Given the contract is heavily redacted it might suggest these are not typical and for a specific purpose.

[my retirement fund] 16/12/2023 20:12

Are they bust yet or still getting away with it?

[40 fathoms] 23/11/2023 22:58

He also revealed that they had suppled cylinders in to Taiwan's Hai Kun-class subs which is the first time I can recall that being mentioned. They have just completed the first of 8 planned boats.

[cerrito] 23/11/2023 18:40

Thanks 40 Fathoms for pointing me in the direction of the vox markets interview. I would be pleasantly surprised if we got firm orders from AUKUS in the immediate future.
Perhaps they are rushing it through so Trump cannot can it.
I see there were 3 if not more companies that Stavely mentioned in today's leader board..not sure if a coincidence.

[40 fathoms] 23/11/2023 11:34

I guess 3 things have happened

1. Confirmation Shareholder Loan Executed
2. Richard Staveley did a bit of a dive in to PRES as part of his VOX markets interview. (key for me was possibility of an AUKUS Announcement soon. Loan should only be seen as a bridge until such time as PMC sold and value of between GBP3 & 10 million is the possible sale range.)
3. Autumn statement adds more money for Hydrogen and we should benefit from that.

[cerrito] 23/11/2023 10:32

180k share volume yesterday-a busy day by PRES standards.Well done to those with more guts thanh me who bought in the mid 20s

[40 fathoms] 24/10/2023 13:47

@darrin1471 - You are spot on in my view. I think the only aspects of the loan you could really argue would be different if we brought on a new traditional lender, is the warrants and maybe an extra 2% or 3% on the interest rate.

So in essence the 5% dilution (at 32p) is the real cost and as dilution goes it is pretty small in the grand scheme of things. Given how the warrant has been priced it is possible for those that wish to offset this dilution by adding a few more shares below 32p per share.

I actually think this announcement will be seen as transformational in review. If it goes to plan we will be in a substantial net cash position, with a large unencumbered freehold property, a business doing that in FY 2025 will do in excess of GBP 23 million in revenue and @ GBP 2.5 million in net profit. With further growth ahead of it if the hydrogen business kicks on. In a good market that has be worth at least 15x plus the net cash on the balance sheet in my view. I reckon business gets sold at some point in 2025.

[darrin1471] 24/10/2023 10:47

Rockwood Strategic have a history of loans to investments.
Percentages look big but numbers in pounds are small if PRES receive PMC proceeds by June 30th 2024 (Q3/24)
Arrangement fee of 3% on £1.5m is £45k
6 months interest at 14.25% would be about £110k.
5% dilution via warrants appears more expensive long term.

A 6-12 month extended loan from Lloyds would of probably cost more in pounds
The loan appears cheaper than an equity raise.

[1c3479z] 24/10/2023 09:57

bank unwilling to take the risk of renewing the loan, so had to go cap in hand to Harworth, etc, who've extracted huge interest rate for a high-risk short-term bridging finance to protect their investment and have to sell off PMC to keep afloat: not the best time to try to sell a business and have to hope they realise a reasonable figure from buyers who know the imperative.

[cerrito] 24/10/2023 08:41

Yes this financing deal is v good business for Harwood and PG but the brutal reality is that it reflects current realities in UK banking. Hopefully it is a short term loan so who wants to hassle of doing the DD for a short term loan? I am going on the basis that it is unsecured. They must have had a big fallout with Lloyds who have security and who could have forced a fire sale of PMC if need be and who presumably are doing nicely thank you providing full banking services including international work to PRES. Need to check the AR when I have the energy to see if Lloyds provide bonding and L/C facilities and if these are affected.






I note the following which suggests that the current trading conditions are as good as it will get but no surprise given the run off of defence work.
Quote
reflected materially improved trading on the prior year, as updated in the Company announcement of 3 October 2023, it is expected to remain at this level in the next 12 months. As a result, and alongside
Unquote
In terms of the PMC sale, I note the following in the May 23rd Full Year results They were actively pursuing this then and not sure what has changed. Be interesting to see who will buy it and if they sell in one job lot or piece by piece. CSC by itself is not big enough to justify a listing and then the fun and games start. Hopefully Schroders hang around.
Quote
Improved trading and a stronger market outlook have presented the Group with the potential opportunity to divest Precision Machined Components activities in order to raise funds and support strategic priorities within Chesterfield Special Cylinders. This opportunity is being actively pursued and all options under consideration will seek to deliver optimum shareholder value.
Unquote

[zingaro] 24/10/2023 06:50

Yes, i wish i could get that rate on my savings: talk about the rich getting richer.

[pugugly] 24/10/2023 06:34

PI's shafted by interest rate - "An arrangement fee of 3% is payable to the Lenders on drawdown and the Facility carries an interest rate of 14.25% per annum."
Nice if you can get it.

[jeevsje] 24/10/2023 06:30

Never invest alongside Harwood...

[40 fathoms] 24/10/2023 06:26

A lot to digest in todays RNS

- PMC will be sold and process is expected to result in settlement before FY end
- Shareholder will provide a loan to bridge loan retirement & working capital.
- Loan is for 5 years
- Interest @14.25% (self amortising no prepayment penalty)
- Upfront of 3%
- Warrants of 5% of capital @32p

On balance I am happy with this .... to the extent there is any dilution it is small and at a decent premium to the in place share price. Proceeds from PMC should be @5 million. So path is now open to being significantly net cash with a singular focus during this financial year but with a facility that provides some flexibility in the event that does not happen.

[darrin1471] 23/10/2023 11:49

HYCAP Group has acquired hydrogen refuelling business Motive Fuels from ITM Power.
The Jo Bamford-founded hydrogen investment firm has taken full ownership of the refuelling company.
Following the closure of three Motive-established refuelling stations operated by Shell in 2022, this May (2023), Motive announced it would close two more stations in London, saying it would refocus its core business on commercial vehicle refuelling.
HYCAP comes as the investment arm of Bamford’s hydrogen company network. Bamford is also the owner of zero-emission bus manufacturer Wrightbus, Executive Chairman of Ryze Hydrogen, Chairman of Hygen Energy, and the heir to JCB.

[cerrito] 21/10/2023 16:19

darrin1471, I while I cannot remember the specifics he raised a to me legitimate question on the state of the factory.
I need to say that their lack of engagement with retail shareholders, while understandable given their current shareholder register, is adding to my reluctance to press the buy button.

[darrin1471] 21/10/2023 10:12

Attention: Suspicious behaviour.
Webcastrati in post 2440 said they were a long term lurker but they wrote some quite detailed opinions on competition in hydrogen cylinders.
I noted in post 2443 that Webcastrati had only registered on ADVFN on the day of their first post.
Subsequently Webcastrati has deleted their original detailed post and replaced it with an innocuous post: "Overall, it’s not a pretty picture in terms of growth, but stability looks ok."
Can anybody recall what was in Webcastrati original post? My recollection is that Webcastrati was talking about two competitors building new facilities, one in a Dutch port facility and another using manmade materials instead of steel for hydrogen? Cerrito, your reply in post 2442 suggests Webcastrati was talking about the quality of the CSC factory.

[40 fathoms] 20/10/2023 23:20

@£2.1m they are now essentially in line with management guidance for this year.

In terms of the time to add or not I think it is worth thinking about headlines that could possibly occur in the coming months and assigning a probability to them and their potential price impact.

- Resolve or don't resolve banking situation. In terms of share price I think resolving would give a few % bump and not resolving it will be a large negative. My view here is that given the strategic importance of what they do to the MOD that one way or another a solution will be found. I point you towards the MOD buying Sheffield Forgemasters 2 years ago as an example of the MODs desire to ensure the Naval/Submarine supply chain. Our situation is much less critical we just need access essentially to working capital and in the worst case can also probably do without it.

- Large Naval or Hydrogen contract. Would obviously depend on size but I think both would give shares a decent bump with traction with hydrogen deals offering a sustained rerate and military orders probably proving less durable for the share price.

- Sale of PMC division. Given they have said this is something they wish to do it is likley a high probability event in the coming months. If they get anywhere close to a "market price" for the division this will have a very significant share-price impact in my view. Overnight you could be looking at a business that has @80 to 90% of its current market cap in net cash and freehold property. The reaming CSC business in this scenario would be profitable to the tune of @£1.5m to @£2m pa (depending how much of the unallocated costs they can takeout)and with a path to £4m to @£5m from order growth and margin improvement over 3 years.