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LONDON (Alliance News) - Pressure Technologies PLC on Tuesday said it swung to a profit in the first half of its financial year, but revenue dropped and it said it will not pay an interim dividend due to investments it is making to try to boost profitability further.
The engineering group said it made a pretax profit of GBP0.7 million in the 26 weeks ended April 2, having suffered a GBP0.5 million pretax loss in the same period the year before, although revenue almost halved to GBP17 million from GBP32.1 million.
Pressure Technologies said revenue was hit by deteriorating conditions in the oil and gas market, which has seen oil prices decline over the past couple of years. Profit, however, grew in the absence of exceptional costs relating to loans it made the prior year and exceptional gains resulting from acquisitions.
Pressure Technologies said it will make a number of investments to "underpin profitability at current trading levels". As a result of this and any potential short-term requirements to increase working capital, it will not pay an interim dividend for the half year. It paid a 2.8 pence interim dividend the prior year.
"Whilst the oil price has shown signs of recovery since January, the board believes that general market conditions will remain as they are, at least, for the duration of 2016," Chairman Alan Wilson said in a statement.
"The current trading volumes are masking the underlying strength of the group, which is in good shape to weather these market conditions. The increasing contribution from the Alternative Energy Division will provide a cushion to group results and diversification in our other divisions together with eventual recovery in oil and gas gives the board confidence in the medium and long term outlook for the group," he added.
Shares in Pressure Technologies were down 4.4% at 130.00 pence on Tuesday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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