LONDON (ShareCast) - (Sharecast News) - Security and surveillance systems developer Petards Group reported an 8% fall in its interim revenue to £8.9m in its half-year report on Thursday.
The AIM-traded firm said its gross margin increased to 37.5% for the six months ended 30 June, however, from 34.6% in the same part of 2018.

It said the margin increase offset lower revenues, with gross profit remaining stable year-on-year at £3.3m, although adjusted EBITDA fell to £0.77m from £1.09m,

Petards reported pre-tax profit of £0.21m for the period, down from £0.51m year-on-year, while cash utilised by operating activities totalled £0.63m, swinging from a total of £0.97m generated in the first six months of last year.

Net debt as at 30 June stood at £0.7m, compared to net cash of £1m a year earlier, with diluted earnings per share for the period falling to 0.35p from 0.88p.

On the operational front, Petards said its order book at period end stood at more than £15m, slipping from £19m at the end of last year's first half, with its current order coverage for the second half totalling around £7m, with £7m more scheduled for 2020.

It said it saw "strong" revenue performance for its rail and traffic products, with both up around 40% over June 2018, although lower defence activity levels from the second half of had continued into 2019, the board explained.

Petards said its new investment in operational and product development capability at QRO continued through the period, alongside its major investment in eyeTrain software solutions, which was now "largely" complete.

"There is also a strong pipeline of new contracts under negotiation which it is anticipated will add to the group's order book in due course," said Petards Group chairman Raschid Abdullah.

"The group continues to secure the majority of opportunities available to it, although more recently the timing of expected orders has been later than originally envisaged."

Abdullah noted that some of the Department for Transport franchising decisions during 2019 had affected the timing of some of the company's orders.

"The board remains confident in the group's future prospects and expects to return a satisfactory, albeit lower than previously anticipated, performance for 2019 weighted towards the second half of the year."

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