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One-off costs dent PTSG

The group grew its top line strongly in the year, but statutory profits fell sharply
March 21, 2018

Last year specialist services provider Premier Technical Services Group (PTSG) delivered record sales growth. Organic revenues rose by 11 per cent, bolstered by acquisitions to reach 35 per cent. Statutory profit and EPS figures fell sharply, prompting a share price fall following the results announcement, but on an underlying basis (which excludes £8.3m-worth of acquisition costs and other expenses) pre-tax profits improved 36 per cent to £10.2m and adjusted EPS by 28 per cent to 9.73p.

IC TIP: Hold at 176p

Pursuing underlying growth remains a key focus for the group in 2018, but chief executive Paul Teasdale said it will also maintain a healthy pipeline of potential acquisitions. In 2017, the group completed three deals. Two of these, Nimbus and BEST, were in the lightning protection sector, while UK Sprinklers is in the fire safety market, which management says has flourished since the Grenfell Tower tragedy prompted closer inspection of safety standards and compliance.

Analysts at Numis predict that stricter building regulations will directly benefit PTSG, driving future growth. They are forecasting adjusted pre-tax profits of £14m, giving EPS of 11p in 2018 (up from £10.2m and 9.7p in 2017).

PREMIER TECHNICAL SERVICES GRP (PTSG) 
ORD PRICE:176pMARKET VALUE:£184m
TOUCH:172-180p12-MONTH HIGH:215pLOW: 100p
DIVIDEND YIELD:0.9%PE RATIO:128
NET ASSET VALUE:31p*NET DEBT:56%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201313.92.52.2nil
201418.01.20.7nil
201525.80.80.61.00
201639.22.62.61.40
201752.91.81.41.60
% change+35-31-48+14
Ex-div:28 Jun   
Payment:20 Jul   
*Includes intangible assets of £26.2m, or 25p a share