Petards has reported steady half-year revenues of £4.415 million, a slight increase from the previous year’s figure of £4.403 million. However, the company has cautioned that its full-year results might not meet expectations.
The increase in operating losses, primarily due to the strategic acquisition of Affini Technology, has been a significant factor in this cautious outlook. Despite these challenges, the company has shown resilience, maintaining revenue and securing new contracts.
Steady Half-Year Revenues
The technology company reported half-year revenues of £4.415 million, a slight increase from the £4.403 million posted in the same period last year. Despite this revenue consistency, operating losses have widened. The firm’s operating losses increased from £489,000 to £878,000, primarily due to the strategic acquisition of Affini Technology.
The acquisition, valued at £2.85 million, significantly impacted Petards’ financials. Adjusted EBITDA for the first half was recorded at £33,000. Despite these challenges, the firm has shown resilience, maintaining a steady revenue stream amid market fluctuations.
Impact of Acquisition
The notable acquisition of Affini Technology has had mixed ramifications for Petards. CEO Raschid Abdullah highlighted that the purchase was necessary for long-term growth, yet it also led to increased operating losses within the initial months.
Abdullah stated, “The successful acquisition of Affini and the improvement in the Group’s order book post-June 2024 is encouraging.” Petards aims to leverage Affini’s capabilities to enhance its current offerings, particularly in the rail and defence sectors.
Order Delays and Market Conditions
Trading in the first half of the year was adversely affected by delays in orders. Key orders expected during this period were postponed, shifting delivery timelines to 2025.
Since the end of the half-year period, several significant orders have been received, though they will contribute to revenues in the coming year rather than in 2024.
The firm’s order book strengthened, standing at £7.1 million at the end of June, compared to £2.4 million at the conclusion of the previous year. This growth is attributed to favourable shifts in market conditions and increased customer approvals for projects.
Boost in Product Sales and Contracts
Petards reported strong sales of QRO’s newly launched Harrier AI camera, reflecting growing demand for advanced surveillance solutions. This product has become a pivotal component of the company’s revenue stream.
New contracts for Petards’ rail business, QRO and Affini, have significantly bolstered the firm’s prospects. These contracts, accumulating over £2.5 million, are expected to drive substantial growth in the latter half of the financial year.
Financial Projections and Market Outlook
Despite witnessing promising developments, Petards has provided a cautious outlook for the full-year results. The company anticipates that despite an improved second half, the full-year performance may not meet current market expectations.
The company remains optimistic about future growth, driven by recent contract wins and the strategic integration of Affini. Petards’ leadership underscores their commitment to navigating market challenges and leveraging new opportunities.
Leadership’s Perspective
Chairman Raschid Abdullah expressed confidence in the company’s strategic direction, stating, “Recent orders give the Board encouragement that, subject to other expected orders being received in sufficient time, the second half of the year should deliver a much-improved performance.”
The emphasis remains on long-term gains and strategic investments, even amidst immediate financial setbacks. Abdullah emphasised that the acquisition of Affini is anticipated to be earnings accretive in the current year and beyond.
Conclusion
In conclusion, Petards has shown stability in revenues despite financial challenges posed by strategic acquisitions and market conditions. The company remains optimistic about future growth, driven by new contracts and enhanced product offerings.
While short-term performance may fall short of market expectations, the company’s strategic acquisitions and order book growth provide a strong foundation for future success.
In conclusion, Petards has shown stability in revenues despite financial challenges posed by strategic acquisitions and market conditions. The company remains optimistic about future growth, driven by new contracts and enhanced product offerings.
While short-term performance may fall short of market expectations, the company’s strategic acquisitions and order book growth provide a strong foundation for future success.