Insight – Issue thirty-five

The recent announcement of our interim results for 2018 highlighted record levels of growth for revenue and profits, with an increase of 37% and 35% on this time last year, respectively.

This growth is largely the result of three acquisitions made in 2017. The acquisitions of Nimbus Lightning Protection and Brook Edgley boosted our position in the Lightning Protection sector, and the acquisition of UK Sprinklers enhanced the capabilities of our rapidly growing Fire Solutions division.

The integration of these acquisitions enabled us to make a further acquisition on 5 July to strengthen and extend our fire protection offering. M & P Fire Protection Ltd, based in Maidstone, is a specialist in the installation and maintenance of sprinkler, dry and wet riser systems.

John Foley, Chairman of PTSG, said: “The first half of 2018 was a period of internal focus to integrate the three acquisitions made in 2017 into PTSG as well as a period of external communication and delivery to ensure that our customer base understood and reacted favourably to the new divisional structure that was implemented in 2017.

“Both objectives were successfully achieved and I am pleased to report continuing record levels of turnover, gross profit, adjusted EBITDA and adjusted earnings per share were achieved in the period.

“Our principal objective is to build a Group which is the UK’s leading provider of clearly identified niche specialist services to customers in the facilities management, construction and property sectors.

“Our focus on compliance to a demanding set of safety standards remains foremost in our thoughts and actions. We continue to see and develop further opportunities which can assist the Group to achieve its stated principal objectives and the pipeline of potential acquisitions remains both healthy and full.

We remain both confident about continuing the positive revenue and profit momentum which is evident in the Group’s results for the first six months of 2018 and also enthusiastic about our prospects for the future.”

Key highlights

  • An excellent first half of 2018 with revenue increasing 38% to £30.2m (H1 2017: £21.9m)
  • Strong underlying organic revenue growth of 14%
  • Gross profit up 37% to £15.4m (H1 2017: £11.2m)
  • Robust gross margin of 51% (H1 2017: 51%)
  • Adjusted operating profit* growth of 35% to £5.9m (H1 2017: £4.4m)
  • Adjusted eps* of 5.03p up 30% (H1 2017: 3.86p)
  • Improvement in trading cash conversion to 81% (H1 2017: 64%)
  • Strong contract wins and renewal rate of 88%, including strong improvement in BEST’s renewal rate moving towards Group average.
  • Interim dividend increased by 13% to 0.9p per share (H1 2017: 0.8p per share).
  • Fire Solutions division demonstrated a particularly strong performance, up 148% on comparative period:
    • UK Sprinklers Ltd acquired in September 2017, fully integrated into the Fire Solutions division with good contribution in H1.
    • M&P Fire Protection Ltd acquired in July 2018 extends our geographical coverage, especially in London and the South East.

* before adjusting items of £4.2m (2017: £2.4m) resulting in a statutory operating profit of £1.7m (2017: £2.0m) and eps of 1.06p (2017: 1.15p)