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I really do hope that potential investors dig as deeply as I have into the reasons for investing here. It appears to be hugely undervalued at £13m given the outlook. It's no blue-sky start up like so many companies carrying this price tag. Excellent provenance good seasoned BoD, Strong supportive shareholder base and no over-promise under-deliver speak. H2 looks to be shaping up really well and next few years look pretty good to me. I honestly believe that IMS will surprise to the upside given its relative exclusivity in recertification and H&S validation. Under Pressure Technologies (CSC previous name) it had some very good years as validations/recertification fell due alongside new work. All in all I find it hard to believe that we've not formed a solid base given my reasoned value argument. There's also the added excitement of the three big holders combining to crystallised their investment and that would require a substantial premium from this MCap, probably double+ imo. I just flag up companies like this that really do merit the time taken to delve deep and justify investment. DYOR here, it's woth it.

The interims as expected were lacklustre after reorganisation and disposal but the short medium and long term prospects and contracts are compelling. CSC is embedded in so many pivotal and essential services. It has superb provenance and exclusivity with the armed forces and blue chips stretching back decades. It is actively engaged in defence and the escalating hydrogen storage and supply industry. All pressurised systems require mandatory periodic and recertification and CSC is one of only a few companies regulated to do it - IMS.

At this MCap...£13m it really is an excellent prospect for p/f inclusion imo. It seems to be the only defence related stock that isn't soaring unlike several start up dreams. CSC is up, active and running smoothly with multiple defence related contracts from multiple governments. A steal imo especially given current 3 big holders.

Chesterfield Special Cylinders’ Integrity Management team operates globally to deliver faster, safer and more economic inspection and testing of high-pressure cylinders. It delivers specialist acoustic emission testing services and operates to the BS 8562 and EN 16753 standards.

High-pressure gas cylinders typically degrade from the inside as well as outside. However, cylinders that cannot be removed or easily reached have historically undergone safety tests far less rigorous than those for transportable tubes.

This has resulted in significant safety, cost and downtime issues for owners and end-users, because of the susceptibility of these cylinders to damage and erosion.

EN 16753 is the new standard for the inspection and testing of hard to reach/impossible to remove, gas tubes and forms the core of Chesterfield Special Cylinders’ Integrity Management service. As part of this standard, CSC IM specialises in delivering acoustic emission (AE) testing which is seen as the future of testing for seamless cylinders.

Chesterfield Special Cylinders is the only company capable of delivering this strict new testing regime worldwide, with bespoke facilities and equipment, operating globally.

Plus

Chesterfield Special Cylinders (CSC) is among a select group of companies globally recognized for their ability to manufacture ultra-large, high-pressure gas cylinders that meet stringent international standards. According to CSC (previously Pressure Technologies plc) it is "one of only five companies globally who can compete for ultra-large cylinder contracts" .

IMS - the Integrity Management Services division under Pressure Technologies plc (now renamed CSC) has shown notable revenue growth in recent years. This is a summary of its annual revenues:

FY2024: £2.4 million, with £1.9 million from defence customers.

FY2023: £1.4 million, including £1.2 million from defence customers.

FY2022: £1.8 million.

FY2021: £1.5 million.

FY2020: £1.3 million.

The division's growth has been driven by increased demand in defence, offshore services, and hydrogen markets. Notably, in the first half of FY2024, revenue rose sharply to £2.0 million from £0.5 million in the same period of FY2023.

The fact that all installed pressurised systems require regular maintenance, validation and recertification is the key. The length of each cycle will reflect in IMS revenues plus additional work and accompanying contracts. It is a highly profitable arm of CSC with great potential to eclipse other contract work imo.

Whilst I agree with your reasoning the question of are there safer places for your money is open to debate. I would argue that the exposure of the business to high future growth fields is compelling at this low MCap. Yes parts of the business are lumpy but recertification and H&S regulatory side is on the up and very profitable. It has embedded blue chip armed forces contracts which are sticky and high barrier to entry. A key point for me in the interims was the revalidation and certification of the very expensive in house manufacturing and testing equipment which negates any unforeseen write downs. A great share to tuck away but also has a big surprise element built in. Small number of free'float shares plus supportive big shareholders amplifies the gap jumps that could easily occur in a single RNS. A buyer would obviously have to persuade these holders to part with their shares at a substantial premium. I personally doubt there are many shares out there underpinned by value and with the potential of 'significant' upside. Happy and patient.

Compelling investment case -

Christopher Mills/Harwood Capital holds 20.8%

Schroder Investment Management holds 19.5%

and Peter Gyllenhammar AB. holds 16.6%

Total 56.9%

A potential buyer could quickly and easily purchase CSC at a decent premium for holders.

Small free float of shares - could rise quickly.

Time for others to do their own research -and hopefully benefit from their own analysis. I'm in and happy to await developments now

IMS: The Crown Jewel

High Margin, High Retention

IMS involves the inspection, testing, recertification, and maintenance of high-pressure gas cylinders — essential in defence, nuclear, offshore, and industrial settings.

This is non-discretionary work. Safety and compliance regulations force clients to engage in regular integrity assessments — regardless of economic cycles.

Recertification work is required every 5–10 years depending on application and jurisdiction.

This means high-margin, repeat business from a relatively fixed client base, especially the Navy and oil majors. It is Cash Generative & Countercyclical

Under Pressure Technologies, IMS was a consistent source of positive cash flow, even when the manufacturing side was lumpy or loss-making. Because of its mobile field service model, capex is relatively light. Much of the expense is labour and logistics, not plant investment. IMS was often referred to in Pressure Technology updates as being the “profit centre” even when the rest of the business was underperforming. Here's why.....

Sticky Defence and Offshore Clients

Key clients include the Royal Navy, BAE Systems, oil platforms, and other industrial operators.

Navy contracts, particularly submarine work (like Dreadnought), provide multi-year recurring contracts.

Offshore platforms require in-situ cylinder testing, which IMS is one of the few in the UK capable of doing — if not the only one.

Current Outlook (Based on June 2025 Interims)

IMS is on track for a record full-year performance. Growth in:

Submarine servicing and refurbishment

Offshore energy deployments (North Sea focus)

Importantly: the interim update noted a shift toward higher-value deployments, suggesting increased day rates or contract sizes.

IMS is a strategic moat — few competitors, regulatory stickiness, and defensible margin. If you're bullish on CSC, it's likely IMS is the engine that allows them to weather volatility in hydrogen and defence production while building toward scale. If CSC were to break out IMS into its own P&L segment, it could potentially justify a higher standalone valuation than the rest of the business.

Here’s a basic Sum-of-the-Parts (SOTP) valuation for Chesterfield Special Cylinders (CSC) based on reasonable assumptions:

Segment EBITDA (Est.) EV/EBITDA Multiple Estimated Value

IMS (Services) £1.375 million 7× £9.63 million

Manufacturing £0.85 million 4× £3.40 million

Net Cash – – £1.90 million

Total SOTP Valuation – – £14.93 million

Current Market Cap: ~£13.9 million

SOTP Value: ~£14.9 million — and this assumes:

No growth in hydrogen or defence manufacturing

Conservative multiples (especially 7× for IMS — it could arguably command 8–10× in private markets)

Upside Potential: Further upside if:

Hydrogen contracts ramp in 2026 (e.g., BP Aberdeen project)

IMS margins or deployments continue to grow

Manufacturing sees operating leverage with order book execution

This just has to be a Sitting Duck at such a dismal MCap with all the qualities and contracts I've outlined below. IMS alone justifies a higher price due to its high barrier to entry position and must have recertification capabilities. Time for a few analysts to do what I've done and look at the multi-faceted potential here. Very bright prospects beckon

IMS is the key, it is a sticky, recurring revenue segment.

High regulatory barriers, safety-critical work (like cylinder testing and recertification).

Defence and energy clients often must use this type of service for compliance and safety — giving IMS quasi-monopolistic pricing power in its niche.

Manufacturing + Services is a much more robust model. IMS can smooth out lumpiness of new-build cylinder contracts.

If hydrogen and defence manufacturing are growth stories, IMS provides stability and margin protection in the meantime.

Defence Exposure

Long-term programmes, margin-rich, politically supported. CSC is a trusted supplier (e.g., to the Royal Navy's Dreadnought submarine programme). UK and NATO defence spending are structurally trending up.

Hydrogen Leverage

CSC is not betting on hydrogen from scratch — it's repurposing deep experience in high-pressure gas containment. When the hydrogen market scales, CSC could be a prime beneficiary.

£1.9m Cash, Inventory & Orders

Good liquidity for a company of this size.

Strong order book suggests demand visibility.

Inventory likely reflects readiness for growth rather than unsold stock.

This is a quality stock in an AIM market has derated massively.

CSC a classic under-the-radar compounder, with a mix of moat (IMS), cash flow visibility, and sectoral upside — yet trading at deep value due to market apathy or low coverage.

Today's RNS interims show that all legacy issues are out of the way and CSC has a clean sheet with £1.9m cash and tiny MCap.

Strategic and Operational Progress

Defence Sector: Secured contracts with the Australian, Canadian, US, and Spanish navies for submarine and surface ship programs, reinforcing CSC's position in the defence market.

Hydrogen Initiatives: Achieved a significant milestone by securing a contract to supply large-scale hydrogen storage systems for the bp Aberdeen Hydrogen Hub project, with delivery slated for Q1 2026.

Integrity Management Services: Anticipated to deliver record performance for the full year, with increased deployments in naval and offshore services.

CSC anticipates a return to full-year adjusted EBITDA profitability, aligning with market expectations. The strong order intake and the strategic realignment following the PMC division sale position the company for sustainable growth.

With a market capitalization of approximately £13.9 million and a net cash position of £1.9 million, CSC presents a compelling investment opportunity. The company's focus on high-barrier, safety-critical sectors like defence and hydrogen energy, combined with its improved financial footing, suggests significant upside potential.

IMS: The Crown Jewel

High Margin, High Retention

IMS involves the inspection, testing, recertification, and maintenance of high-pressure gas cylinders — essential in defence, nuclear, offshore, and industrial settings.

This is non-discretionary work. Safety and compliance regulations force clients to engage in regula

why on earth bab**** haven't tucked this into their armoury yet i don't know. perfect in-house fit.

Small MCap, cash in the bank, increased inventory to fulfil orders and major projects in the bag with blue chip clients and Govts. There is so much going on here for such a small MCap. Defence is a major growth platform and CSC is a prime contractor. Hydrogen transport and infrastructure products and services are both in the bag and pending. The other big potential is in IMS integrity management services that tests and validates all in situ pressurised systems. This is a regulatory requirement and CSC is a key provider. There are multiple reasons to tuck this away in your p/f and the increasing possibility of a bid from a tier 1 user is compelling imo. Underpinned by an excellent horizon.

Lots of progress going forward here in good growth areas with major projects out to the horizon. H2 should see big swing to profitability sustained to 2028 and beyond. Nice little p/f tuckaway that could easily attract predatory eyes with 3 major shareholders on the books.

Chris Walters, Chief Executive, Sally Millen, Director of Finance and Chris Webster, Chief Operating Officer will host a live online presentation and Q&A relating to the Company's interim results, strategy and outlook at 10:30am today. Will give opportunity to explore segment progress.

Significantly stronger performance is expected from CSC in the second half of the year. The strong order intake in the first half of the year and robust order book coverage support second-half revenue expectations and a return to full-year Adjusted EBITDA profitability, in line with market expectations.

Given very positive outlook and very low MCap CSC does look vulnerable to bid but rerate should start in ernest now given shareholder base.

With these guys holding decent hands in CSC...

Significant Shareholders (>3%) as at 28 February 2025.

Harwood Capital. 8,033,321. 20.8%

Schroder Investment Management. 7,542,991. 19.5%

Peter Gyllenhammar AB. 6,425,000. 16.6%

Excellent blue chip clients and contracts plus highly lucrative horizon. Let's see what the BoD have to say tomorrow.

Great entry price here...

At last it's hitting the radar....

Del Boy....OF&H.....next year Rodders... shouldn't have to wait so long here.

Just a matter of time. Sellers being mopped up.....

Chesterfield Special Cylinders compressed gas storage solutions serve safety-critical applications across diverse sectors, including defence, hydrogen, aerospace and energy. From supplying submarines and fighter jets to decarbonisation projects and industrial gas transportation, our commitment to quality, safety, and innovation drives our success.

That's all you need to know for now.