Pressure Technologies Share Discussion Threads

[cerrito] 27/8/2024 17:24

40 Fathoms, they still have to the end of the week to meet their August target date, although someone lost patience this morning and the small sale was enough to move the price down.
At the moment I am taking it in my stride as I have got it into my head that there is quite a bit of annoying detail in the PMC businesses to be sorted.

[40 fathoms] 23/8/2024 00:04

If the sale of the PMC division is going to happen you would think it would have to be soon. For the sale of a small business this is taking an extraordinary amount of time. This process needs to be closed or killed.

[cerrito] 01/8/2024 09:35

I saw the fall in the share price yesterday and checked the volume yesterday and Monday July 29 and in both days low.
I am neither buying or selling as have no vision as to what the appropriate share price is in the current circumstances.

[cerrito] 07/7/2024 18:39

Just caught up with the note from Singers which came out on Tuesday. I had gone on the basis thar given the importance of the PMC sale they were not going to publish anything.
FWIW, they have a buy with a 12 month target price of 40p

[40 fathoms] 04/7/2024 00:20

Landed certainly, however,I would suspect that they have caught what ever they are going to catch from HAR 1 & 2 already.

Did he provide you with more confidence around the sale of PMC division ? Obviously there is always risk until it closes but he gave me the impression that the PMC division was now in good shape.

If they get a price in the range of the book value (or better) for PMC it will be transformative to the financial health of the company.

As you say, what the business looks like after the disposal will depend a lot on hydrogen. defence, industrial and integrity management can probably average a small net profit GBP 1 to 2 million pa. Any upside to these numbers, if it comes at all, will come from hydrogen.If we see decent order levels from HAR1 we can start to make informed judgments about the impact from each additional HAR allocation round. It is going to be a very interesting run in to the end of the year.

[cerrito] 03/7/2024 15:47

The Paul Hill vox markets podcast this week is with PRES non exec Richard Stavely.
For me he was quite right to emphasise the huge amount of freehold land next to the motorway.
Given his position he was right.to be circumspect about the valuation of CSC.
With the run off of the Dreadnought programme need to get overseas defence business.Hydrogen has big potential both with the HARS 1 and 2 programme , but the fish have to be both landed and caught.

[zingaro] 25/6/2024 07:24

Yes, pretty poor results from CSC.

[pugugly] 25/6/2024 07:10

To coin a phrase "Under Pressure" Chartwise support at 30p.

[40 fathoms] 25/6/2024 06:17

The key bit from the results are in my opinion.

"A preferred acquirer has been identified who is currently conducting final due diligence. The Board is targeting completion of the transaction in August 2024."

and

"An impairment review was undertaken for each of CSC and PMC as at 30 March 2024. The review concluded that no impairment was required in these Interim Results."

This is strongly suggestive that the process for PMC should result in a sales price in excess of the PMC carrying value which is @GBP +6million.

[aishah] 23/5/2024 13:15

Richard Staveley a keynote speaker at Mello today. Maybe mentioned PRES.

A bit in this podcast from him as well:

[cerrito] 23/5/2024 13:01

Something was cooking yesterday as I have just seen that volume was high yesterday,

[40 fathoms] 23/5/2024 11:18

To the extent it is anything at all it could be the PMC sale, it could be qualification for supply in to the US submarine programs or it could be some large HAR1 Hydrogen storage orders.

[aishah] 23/5/2024 11:10

Quite a surge today. News of PMC sale imminent? What sort of multiple are people expecting if it goes through?

[cerrito] 14/5/2024 18:45

Thanks for those thoughtful comments 40 fathoms.
I need to say that over the last 3 weeks PRES has been out of sight out of mind for me so have just chanced on these comments.

[40 fathoms] 22/4/2024 01:13

@Cerrito - I have been thinking a bit about your concern about shareholders getting sharfted by Gyllenhammer and Harwood making a cheeky offer and I think it certainly represents a possible outcome and in different circumstances maybe even a likely one.

However, to my mind and in this case, what downgrades it from being likely to only possible is the following.

1) At the AGM resolution 13 (a special resolution) - the disapplication of preemption rights - was not passed. This suggest there is a significant minority of holders who are not looking for a quick exit and if anything are prepared to put their hands in their pockets if more equity is required. Management and Rockwood would certainly have noted this.

2) There is a problem for Harwood given that this asset is held within Rockwood. Rockwood does not have the size or scale to take on this asset at this time and if Harwood were to step in Rockwood would be in a very difficult position as it would need to be able to justify to its shareholders that it sort to maximise value.

3) The number of votes withheld from the independent directors reappointment and from the directors renumeration report almost exactly match the number held by Gyllenhammer. Withholding votes is unusual, so I find it hard to believe it was some combination of retail and small instos. If it is Gyllenhammer it was a warning shot and might suggest at this stage he is not in full alignment with Harwood.

[cerrito] 05/4/2024 16:32

No surprise that yesterday's fall was accompanied by a high trading volume for PRES, but to put it in context only 150k shares traded.

[40 fathoms] 16/3/2024 02:28

@ banner - to your point I would add the following

- CSC has an unencumbered freehold property valued at £2.6m

- In the last annual accounts "The carrying value of the net assets of PMC at 30 September 2023, adjusting for cash, intercompany and deferred tax balances, was £5.8 million. On this basis, an impairment charge is not required." As there are almost no intangibles this should provide a guide for the likely minimum sales price that should be achieved for PMC division. My own guess is we will see something closer to £10 million.

- CSC has much higher gross margins than PMC so after divestment the group gross margins will improve substantially.

- We are expecting more good news at CSC in the nearer term - Including US Navy, HAR1 Hydrogen orders.

It is also clear given it would be almost impossible for any of the top 3 holders to exit in the market that so they will likely be looking for a trade sale. I suspect that is probably in 2026. If they can capture a decent share of work from the various HAR funding rounds it could well be at a price significantly north of your 75p per share.

I am very interested to see the level of orders we get as a result of the HAR1 funding round. HAR1 has funded 125MW of capacity out of a total of 4GW it intends to fund by 2030.

[baner] 14/3/2024 08:19

PT should turn into substantial net cash once PMC is sold. CSC should be worth £20m++ and accordingly the PT shares should be heading well north of 50p in a not too distant future. If CSC is sold to a trade buyer we could well see 75p in total value of the PT share.

[darrin1471] 14/3/2024 08:02

Contract Placements and Update on Sale of PMC Division

Pressure Technologies plc (AIM: PRES), the specialist engineering group, is pleased to announce that Chesterfield Special Cylinders ("CSC"), its wholly owned subsidiary, has been awarded two major contracts, as expected, in the defence and green energy sectors and maintains its outlook for FY24. The Group also provides an update on the sale of the Precision Machined Components ("PMC") division.

BAE Systems Australia Contract

CSC has been awarded a major contract to supply air pressure vessels to the Royal Australian Navy's Hunter class frigate program.

The contract award by BAE Systems Maritime Australia covers the first batch of three frigates in the program and will underpin the Group's expected global defence order book development in the second half of FY24. Initial manufacturing milestones will commence later this year and pressure vessels are expected to be delivered to the program over the next three years. Pressure vessels manufactured by CSC will form an integral part of safety-critical onboard systems.

The Hunter class frigate is based on BAE Systems' established Type 26 Global Combat Ship platform, currently under construction for the UK's Royal Navy.

Cheesecake Energy Contract

CSC has also been awarded a major contract to supply high-pressure steel cylinder packages to Cheesecake Energy Limited ("CEL"), a UK developer of sustainable thermal and compressed air energy storage systems, for a pilot project funded by the Department for Energy Security & Net Zero.

Utilising cylinder packages supplied by CSC, CEL systems will store surplus energy generated by a dedicated solar power plant for use in periods of high energy demand, reducing reliance on fossil fuels and the grid, and lowering carbon emissions.

This significant contract award for CSC is for a total of 48 cylinders with initial manufacturing milestones commencing later this year.

Update on Sale of PMC

As previously announced, the sale process for the PMC division was launched in December 2023 with the release of information to a range of interested parties. Following engagement with potential acquirers, the Board has received a number of non-binding indicative offers for the division.

During the next phase of the process, the Board intends to provide selected potential acquirers with additional access to PMC and will invite final offers for the division.

The Board continues to target completion of the sale process in the third quarter of FY24 and will provide a further update in due course.

[40 fathoms] 24/2/2024 00:59

It seems like we are seeing a tiny bit of buoyancy in the share price. Maybe the anticipation of 2 or 3 bits of good news that could drop in the coming months has at very least dried up some of the selling.

1) Sale of PMC business - If buyer can be found should be between £6m and £9m
2) First HAR1 orders placed - Should be significant in context of historical H2 revenue
3) Qualification as a supplier to US submarine programs.

[cockerhoop] 31/1/2024 11:34

40 Fathoms,

It's a while since I followed PRES closely.

I agree the presentation suggests they've rebooted their attempt to become qualified for US Naval contracts. A few years ago PRES suggested the incumbent supplier wasn't a top class or well invested business. With the expansion of the US submarine program there's certainly opportunities (as we've seen with large Naval contracts awarded to GDWN) to become part of the program.

I hope they're successful, it would be great news.

[cockerhoop] 30/1/2024 15:16

40 Fathoms,

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

I'd suspect this refers to the SSN-AUKUS program with the submarines being built in the UK and Australia.

I'm aware PRES tried very hard to get designed into the US Naval program for many years - eventually giving up when they became cash constrained a few years ago.

[40 fathoms] 30/1/2024 13:10

@Baner - On the central costs issue it is overstated by@ 1.2 million as it includes a number of (hopefully) one off finance and advisory fees. Still an issue but not such a big one.