Pressure Technologies Share Discussion Threads

[darrin1471] 24/10/2023 11:47

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 10:57

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 09:41

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 07:50

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

[pugugly] 24/10/2023 07:34

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 07:30

Never invest alongside Harwood...

[40 fathoms] 24/10/2023 07:26

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 12:49

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 17:19

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 11:12

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] 21/10/2023 00:20

@£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.

[cerrito] 19/10/2023 22:08

I have just gone through the October 5th VSA note on Research Tree. I see VSA have posted previous notes on PRES on Research Tree but I have not read them,  concentrating on the notes from Singers.VSA are of course neither a broker or nomad and I see they classify the note as a Marketing Communication(Connected Research). I feel I should know what that means but confess I do not know.I note that they have lowered their adjusted Ebitda for this current 23/24FY from their previous forecast of £3m to £2.1m.This is due to the forecast peaking of the defence orders. They have a to me gutsy forecast of hydrogen revenues going from an expected 22/23 £2.5m to £4m in this 23/24 current FY.Their forecast for PMC revenue this current FY is a to  me conservative £12.7m  from £11m.I see that share trading levels have gone back to sleep over the last fortnight. Perhaps PG and Schroder are happy with their current holding. I am dithering as to whether to add. I would much prefer clarity on the banking situation. I have no real feel for what hydrogen orders they are getting. The CSC website does not give additional information, nor does the PRES website. 

[cerrito] 10/10/2023 10:27

Brett Gordon our new 3.16% shareholder has 5.8% of another AIM share which for my sins I am in-COG.

[40 fathoms] 06/10/2023 09:15

If you project forward by 6 or 9 months the company could look completely different

- Single focus on pressurised cylinders
- GBP 4 million to GBP 6 million in net cash (sale of PMC)
- Freehold mortgage free property
- Revenue of GBP 22 million and clear path of growth
- EBITA of between GBP 3 & 4 million
- Significantly decreased central costs
- Significant progress with strategic hydrogen and military orders.

If this is what the Company looks like at that point in time it is not a GBP10 million market cap company.

[arthur_lame_stocks] 06/10/2023 05:08

I think you have the wrong P Gyllenhammar. Our one is a value investor that typically buys large stakes in companies trading at a discount to net tangible assets, not the ex Volvo guy.

[40 fathoms] 06/10/2023 00:02

Peter Gyllenhammer is an interesting shareholder.

[darrin1471] 05/10/2023 18:18

1,567,646 (same number as yesterday) went through as 2 trades today at 24.8p
Looking back at Wednesday's trades, another 1.25m went through at 24.8p @ 17:15

[darrin1471] 05/10/2023 16:29

Share price appears well "managed" since the update.

"The Board is in constructive discussions to raise new finance and will update further in due course."

Pure speculation but if PRES wanted to raise £5m through a rights issue then large shareholders would be consulted and Schroders may have wanted to reduce before committing to the rights issue.

[darrin1471] 05/10/2023 16:02

Peter Gyllenhammar the buyer of 6.6% from Schroders .
Schroders sold 7.45% in total so far

[darrin1471] 04/10/2023 17:04

Another 1,567,646 gone though after hours at the same price 24.924p

[cerrito] 04/10/2023 16:08

For me two reasons it is too bad that Schroders was the seller yesterday afternoon.
The first is that they have the most to sell and this will be a shadow over the share price.
The second is rightly or wrongly-probably wrongly-I have got it into my head that in the corporate restructuring there will inevitably be that of all the major shareholders their interests are most aligned to mine, especially in any votes which require a 75pc majority.

[40 fathoms] 03/10/2023 23:31

It would be unusual to do an IMI or equivalent on a trading update, I suspect that will come with the results.

One of the things they do mention in the RNS and which I think is relevant is the expected demand from GLOBAL navy orders. In terms of Hydrogen, to make a very significant step change in group profitability all they need to do is maximise the capacity on the site. We do not need to dominate the market taking, turnover from the Hydrogen segment of 5 or 6 million pounds per annum has very significant impact on profitability.

[darrin1471] 03/10/2023 23:31

Webcastrati: You say you have been a longtime lurker here but you only registered your ADVFN account today.

[cerrito] 03/10/2023 21:33

darrin1471
Thanks for pointing out.I assume we will get a RNS. PG?

Webcastrati
Good point about how state of the art the factory is...about 6 years ago I went on a factory tour after an AGM and at that time it did not give the impression of being state of the art.
Hopefully we will have an IMC at which this question can be asked.


baner
Yes the AR is not very clear.Once again let us hope we have an IMC or equivalent.
We get
Central costs
Unallocated central costs (before exceptional administration costs) were £2.0 million (2021: £1.9 million). In respect
of the Group’s various share option plans there was a net cost in the year of £0.1 million (2021: £0.1 million).
and
Exceptional administration costs
Exceptional administration costs of £1.0 million principally included costs associated with the refinancing of the
Group’s banking facilities of £0.3 million, the final costs of £0.2 million related to ongoing software licencing for the
cancelled ERP system impaired in the prior financial year, and other legal and associated costs relating to the
surrender of property leases with non-utilised sites under tenancy arrangements of £0.3 million. There were other
costs of £0.2 million for several other matters that included a historical settlement dispute and an obsolete stock write
off, both in the CSC division.

[baner] 03/10/2023 20:14

How on Earth can they have £1.9m of central costs in this midget company ? Do they serve free caviar and champagne in the canteen? The break up value of PT should be not less than 50-70p - time for the BOD to deliver the value to the shareholders.