PTSG.L Regulatory News (PTSG)

21 January 2019

Premier Technical Services Group PLC

("PTSG" or the "Group")

Trading update and Acquisition of Trinity Fire and Security Systems Limited ("Trinity")

Trading update

Premier Technical Services Group PLC ("PTSG" or the "Group"), the niche specialist services provider, is pleased to announce that its results for the year ended 31 December 2018 are anticipated to be in line with the Board's expectations.

Transformational Fire acquisition

The Group is also pleased to announce that it has significantly extended its Fire Solutions business through the acquisition of Trinity (www.trinityfireandsecurity.com).

Based in Exeter, with 10 offices throughout the UK, Trinity is a well-established, high quality specialist in the testing, maintenance and installation of fire and security systems. The initial consideration is a cash payment of £10.8m. Trinity will be acquired with c.£3.1m of cash on its balance sheet. The initial cash payment has been financed with £7m that the Group continued to hold on its balance sheet following its October 2018 placing, with the remainder drawn from the Group's existing banking facilities.

Deferred consideration of up to £5.0m is also payable over two years, subject to Trinity achieving stretching and escalating milestone profitability targets which are self-financing in each of those periods. The deferred consideration can be paid in cash or shares at the option of PTSG.

Trinity achieved unaudited revenue of £36.8m for the year ended 30 June 2018, delivering an EBITDA of £1.5m. The business has a current revenue run rate of c.£40m generating an EBITDA of c.£2.2m. 80% of revenues are generated from fire services with the balance coming from security and related activities. Unaudited net assets at 30 June 2018 were £2.2m, with net assets on completion to be c.£2.7m.

The Group is confident that, when fully integrated into PTSG and its proven operating platform, there will be significant opportunity for both revenue growth and margin enhancement.

Paul Teasdale, CEO of PTSG, said:

"We are delighted to welcome Trinity, a well-established and respected business in the UK, as our latest addition to the Group. This transformational acquisition will significantly extend PTSG's Fire Solutions division to offer a full suite of fire protection services. This now includes the design, source, supply, installation and servicing of the full range of best-in-class fire prevention solutions. Critically, the acquisition further increases the percentage of Group revenues underpinned by a clear regulatory and compliance requirement.

"We look forward to working with Trinity's senior management and their colleagues to grow our Fire Solutions division as it benefits from PTSG operating platform and nationwide coverage with a combined base of 20,000 corporate customers."

Acquisition Highlights & Rationale:

· The acquisition of Trinity enhances PTSG's existing Fire Solutions offering (sprinklers and dry and wet risers) through the extension into other addressable systems such as:

o Fire detection and alarms

o Emergency voice communication

o Fire suppression, and

o Life safety.

· A transformational deal with a current run rate in excess of £40m which is concentrated in testing and compliance services and will more than double the size of PTSG's Fire Solutions division. Trinity has in excess of 2,000 customers servicing more than 29,000 sites.

· Trinity has c.£24m of recurring revenue from its maintenance base of 8,500 contracts ranging from one to five years, coupled with a contract renewal rate in excess of 80%.

· As a national provider of fire and security services concentrated on testing and compliance services, the acquisition is wholly aligned with PTSG's stated strategy of continuing to increase its revenues from compliance related services. It is also highly complementary with PTSG's existing national presence and customer coverage.

· This excellent fit is expected to generate strong cross-selling opportunities within the division as well as across other PTSG disciplines.

The business will be integrated into PTSG's Fire Solutions business. Trinity's current leadership team, Andrew Cotton, Paul Clayton, Robert Holliday and Shaun Corbett (who alongside a Trust, represent the principal vendors) together with the rest of the Trinity management team will remain with the Group and work with PTSG's management team to grow and expand the acquired business.

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For further information, please contact:

About PTSG - www.ptsg.co.uk 

Premier Technical Services Group PLC is the UK's leading provider of façade access and fall arrest equipment services, lightning protection and electrical testing, steeplejack and rope access services and fire solutions.

Operating through four divisions, Access & Safety, Electrical Services, Building Access Specialists and Fire Solutions, the Group provides highly-engineered industrial products and quality services and has a substantial presence in a number of niche markets.

PTSG provides a central information service for its businesses and champions the dissemination of key information and best practice. PTSG unites its constituent businesses under one clear identity, which supports smarter working and delivers top class service to its customers.

Headquartered in Castleford, West Yorkshire, the Group employs more than 850 people across 21 UK sites, who service more than 150,000 buildings across the whole of the UK for over 18,000 customers in a wide range of industries. The Company is listed on the LSE AIM (PTSG.L)