7 December 2010 – final results

Results for the year ended 2 October 2010 have not been well received, with the shares being marked down from the previous day’s closing price of 207.5p. This appears to be a reaction to the Chairman’s comment that the company expects “the coming six months to be the lowest point in the cycle in shipments to the deepwater offshore oil and gas sector. However, the business is diversifying and it is more important to look at the bigger picture over the longer term. Net cash was £6.5m at the period end (2009: £7.9m) following the acquisition of Al-Met. Pre-tax profit fell to £3.5m from £5.1m but in a tough year that is still fairly chunky in comparison to the market capitalisation of £20.7m. Basic earnings per share fell from 32.1p to 22.3p. A final dividend of 4.8p per share was declared, making 7.2p for the year versus 6.6p a year earlier. We would expect some news on acquisitions in the short to medium term and these may well drive further value into the business. The share price fall looks overdone and at this level we rate Pressure Technologies as a BUY.