Order book bulges at Gateshead firm Petards

Gateshead technology specialist Petards has said its bulging forward order book has given it greater working capital requirements

The business, which develops security and surveillance systems and employs around 80 people at its Team Valley base, issued a trading update in which it said trading conditions for 2013 had remained difficult but that expected increases in orders has been realised.

The statement said: “In the period since it reported its 2013 interim results on September 30 the company has been awarded a number of significant contracts by both its rail and defence customers. The value of these orders is in excess £10m and as anticipated the revenue benefit of these orders will be largely seen in 2014. The company’s current order book is approaching £20m of which approximately half is expected to be delivered in 2014.

“The company presently has no bank borrowings although the significant increase in its order book brings with it a requirement for greater working capital. The Board is presently reviewing its options for addressing this requirement.”

Shares in Petards soared by 69% last week after it announced an MoD deal, its fifth lucrative contract win in three months. The security and surveillance system manufacturer was awarded a contract worth more than £7m by the Ministry of Defence (MoD) for the supply and support of secure radio equipment for the RAF.

Most of the project will be carried out over the next 15 months, but Petards will also provide maintenance and support for the equipment over the next 10 years – a deal which could then be extended by a further five years.

The deal followed a seven-figure framework deal with Hitachi in September, to supply parts for the Intercity Express programme, and deals with train builders Alston and Bombadier, and manufacturing giant Hyundai.

Chairman Raschid Abdullah said: “Business is still quite tough but we work very hard.

“The order book is much improved compared to the same time last year, and the workers in Gateshead very much deserve a pat on the back. I may be the chairman but it is the organisation that makes it work.

“These contracts have a long gestation period, and take a long time to put together.

“This contract doesn’t represent new business as such, but we put in a competitive tender and won.”

Abdullah said the company chose to focus on working with train builders but that they would continue to work with other core markets. He said: “We have three core markets – transport, emergency services and defence, but I don’t think we will come down to being a one core business.”

Petards’ interim results for the six months to June 2013 showed a drop in sales to £3.6m, from the £4.7m posted in the same period in 2012, but the business will now expect to see a healthy lift in revenues in 2014 on the back of a number of deals.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer