Video surveillance specialists Petards has announced a deal to buy a Midlands firm after issuing results which saw it falling to a loss in 2023.
The Gateshead firm, which creates products for the rail, defence and traffic markets, has issued final results which saw its revenues fall from £10.9m a year earlier to £9.4m. A previous profit of £524,000 became a loss after tax of just over £1m.
The company said it had received “strong” revenues from service and engineering support and had received significant orders for new products launched in December. Its order book at the end of the year was down from £4.1m a year earlier to £2.4m, however.
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Petards also said that it was making “significant progress” on its acquisition strategy, and in a separate announcement it outlined a deal to take over Midlands firm Affini Technology Group. The Derby firm provides communication technology to the transport, blue light, energy, defence and construction sectors.
Petards said that the £2.8m deal was subject to the release of bank security given by Affini by June 27. It will fund the deal with £1.7m from its cash resources and £800,000 from its overdraft facilities.
The company said that the acquisition of a profitable and cash generative business would help it build its presence in target markets and add new services to its portfolio.
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It said: “The directors believe Affini is a highly complementary business and will be a good cultural fit with the existing group. It has an experienced executive leadership team, who are remaining with the business with strong engineering expertise, consistent business values and principles, an aligned commercial approach and comparable operational procedures. The directors believe that these factors will help reduce integration risk.”
Affini was founded in 1974 when the radio division of the organisation that formed British Airways was carved out as a separate business. Its unaudited results for 2023 show revenues of £5.6m and operating profit of just over £400,000.
Raschid Abdullah, Petards chairman, said: “We will be delighted to welcome Affini and its staff to the Petards Group and look forward to working together in growing the expanded group during this exciting new phase in Petards development. This strategic acquisition will both significantly increase the group’s scale and revenues, while complementing its present operations. As well as being complementary to the group’s existing activities within defence, traffic and rail, it will broaden its reach into new sectors, including those of energy, aviation and buses.”
Affini CEO Ian Carr said: “We are looking forward to joining the Petards Group which shares our passion for delivering innovative technology, expertise and exceptional customer service. From Affini’s strong heritage in critical communications within the aviation sector, I am proud that in recent years we have expanded into new markets, added new technologies, and secured prestigious projects across the bus, rail, energy, construction, and defence sectors.
“With Petards operating across many similar and complementary markets, I believe this represents a significant strategic milestone for the business and will enhance its ability to take advantage of the growth opportunities in its target markets.”
In the results announcement, Mr Abdullah said: “Group trading was slightly ahead of budget for the first quarter but the second quarter has so far shown some signs of weakness relating to delays in respect of some orders anticipated to be received and delivered in the period. The current expectation is that most, if not all, of these orders will be received during the course of the year, revenues from which will be determined by the timing of order receipt.”