Newspaper article The Journal (Newcastle, England)

Petards' Capital Reduction Plan; SECURITY

Newspaper article The Journal (Newcastle, England)

Petards' Capital Reduction Plan; SECURITY

Article excerpt

Byline: COREENA FORD coreena.ford@ncjmedia.co.uk

SECURITY and surveillance specialists Petards has proposed a capital reduction plan to wipe out a PS26m deficit on its profit and loss account, to pave the way for potential dividends for shareholders. The Gateshead-based AIM-quoted business is to put forward the capital reduction plan to shareholders, to create reserves and give it the flexibility to pay dividends and make other capital returns to shareholders.

Legislation currently bans the firm from paying dividends as it has negative distributable reserves, but the firm, which employs around 80 people at Team Valley, said it has made good progress over the last two years, making this an appropriate time to make the capital reduction, creating flexibility to make dividends.

The firm works in the rail, security and defence markets, manufacturing electronic solutions including video and sensor data surveillance, radio communications and threat simulation systems on mobile platforms, all of which it sees as growth areas.

A market note announcing the plans said: "Over the past two years the Group has made good progress.

"Revenues for the year ended December 31 2014 more than doubled to PS13.5m on which the Group made a profit after tax of PS620,000.

"The Group's interim results for the six months ended June 30 2015 showed a similarly strong performance generating profits after tax of PS356,000, up 3% on those achieved in the same period in 2014.

"Operational cash generation over such six month period was PS558,000 and resulted in cash at bank at 30 June 2015 of PS2m.

"The Board believes that the company operates in growth areas and that it has the products and services plus available technical and technological skills to develop new products, as well as the sales and marketing abilities to become a larger and more successful operator in each of the sectors in which it operates.

"It is these business strengths and confidence for the future which have led the Board to recommend that the building blocks to create distributable reserves be put in place. …

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