Petards shares soar after £7m MoD contract win

Shares in North East technology firm Petards soared by 69% after announcing an MoD deal, its fifth lucrative contract win in three months

The security and surveillance system manufacturer, based in Gateshead, said it had been 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.

The deal will see the 80-strong firm replace the RAF’s entire Secure Management Radio Equipment (SMRE), a system which allows air traffic control at RAF bases to direct the safe movement of vehicles and personnel on the airfield.

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.

Shares in the AIM-listed company rocketed soon after the announcement, peaking at 29p – a rise of 112% on its opening price – and chairman Raschid Abdullah said the contract was testament to the firm’s expertise and hard work.

Abdullah said: “We are absolutely delighted to have been awarded this contract by the MoD with whom we have a long-established relationship in the provision and support of mobile radio systems.

“I believe that our success in securing this business is clear recognition of Petards’ expertise, experience and service in the telecommunication field.

“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.”

In September the business announced its interim results for the six months to June 2013, which showed a drop in sales to £3.6m, from the £4.7m posted in the same period in 2012, but chairman Abdullah said he fully expected revenues to rise in 2014 on the back of a number of deals. Those deals are now coming to the fore in a fruitful second half of 2013 for the business, with multi-million pound contract wins in September and October.

The firm announced a seven-figure framework deal with Hitachi in September, to supply parts for the Intercity Express programme.

Further deals with train builders Alston and Bombadier, and manufacturing giant Hyundai, followed.

Abdullah said the company chose to focus on working with train builders for two to three years, a decision that was now bearing out, but that they would continue to work with other core markets. He added: “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.”

Shares in Petards closed at 19.44p, up 69%.

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