Return to profit for Tyneside tech security company
TYNESIDE security technology specialist Petards says a reduced cost base and strong trading across its traffic products division has helped it return to profit.
Announcing full year results for 2021, the Gateshead-based firm said operating profit was £570,000, a turnaround from 2020’s operating loss of £1.14m, while revenue increased from £13m to £13.5m.
It said the performance was achieved against a backdrop of continued effects of the pandemic on Government spending and the “state of flux” in the UK rail industry, including the planned introduction of the state-owned Great British Railways.
Petards also told investors the order book for eyeTrain – its train surveillance business – would include smaller projects with shorter delivery times in contrast to large, multi-year projects seen in recent years. The eyeTrain division underwent restructuring in 2020 with the loss of 40% of its workforce, and other cost-saving measures continued into 2021.
Petards pointed to the Government’s plans to complete a “root and branch” review of the UK rail industry – set out in the May 2021 policy paper “Great British Railways: Williams-Shapps Plan for Rail” – and said it had impacted short-term investment decisions by central government and through the demise of independent training operating companies.
It said that knowing the plan was imminent and the start of impacts on Petards’ rail customers, the group decided to plan ahead for there being little new business available from major new build or refurbishment rolling stock projects. Meanwhile Petards’ defence division made an increased contribution to the group’s profitability as orders grew in 2021, and a five-year framework contract secured with the Ministry of Defence for threat simulator systems gave the firm hope of further order growth in coming years.
The QRO Solutions business – a provider of automatic number plate recognition systems – saw record revenue and profitability.
Future potential acquisitions were also hinted at, though investors were told Petards had struggled to agree a fair price for target companies in the rail and infrastructure surveillance markets. Raschid Abdullah, Petards chairman, said: “The group closed the year with an order book of around £7m and trading for the first three months of 2022 has started well, with the group trading slightly ahead of management’s expectations.
“At present this is thought to be timing related rather than an indication of a better than expected performance for the year. With scheduled deliveries of £8m already secured for the current year by the end of the first quarter, the board has confidence that the Group is positioned to make further progress in 2022.”