Join our community of smart investors

Premier Technical builds out fire and lightning protection

The group saw strong organic growth in the year
March 27, 2019

Premier Technical Services (PTSG) continued to invest in its fire solutions and electrical services divisions in 2018, completing strategic acquisitions in each segment. While it only closed the deals in July and October, management is already reporting strong growth, with M&P Fire Protection seeing revenues up 80 per cent and Guardian Electrical Compliance growing by a half.

IC TIP: Hold at 133p

The two divisions drove strong organic revenue growth, with the contribution of revenues from compliance and maintenance activities increasing as a proportion of the group total. Management expects this to rise further in the coming year with the acquisition of Trinity Fire and Security Systems post period-end. Chief executive Paul Teasdale said he expects fire and electrical to be “the two most prolific areas of the group in 2019”.

Buying up these businesses came at a cost, however, and while the group’s share placing in October left it with an improved debt position at the end of the year, deferred payments weighed heavily on profits, comprising the most substantial part of a £10m-plus adjustment to statutory figures.

House broker Numis is forecasting adjusted pre-tax profits of £19.9m this year, giving EPS of 13.6p, up from £14.3m and 11.9p in 2018.

PREMIER TECHNICAL SERVICES (PTSG) 
ORD PRICE:133pMARKET VALUE:£163m
TOUCH:130-135p12-MONTH HIGH:200pLOW: 106p
DIVIDEND YIELD:1.4%PE RATIO:48
NET ASSET VALUE:45p*NET DEBT:21%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2014**18.01.20.7nil
201525.80.80.61.00
201639.22.62.61.40
201752.91.81.41.60
201869.13.72.81.80
% change+31+108+102+13
Ex-div:27 Jun   
Payment:19 Jul   
*Includes intangible assets of £40m, or 33p a share **Pre-IPO figures