Security firm contracts point to profitable future

Apr 30 2009 by Peter McCusker, The Journal

A SECURITY camera company has landed two major contracts worth almost £4m which will help maintain its profitability after a decade of losses.

Stock market-listed Petards, of Gateshead, says the major orders reinforce the strength of its market-leading offering and augur well for a profitable new era.

The two contract wins are for the company’s new generation of on-board digital CCTV systems for trains and buses – called eyeTrain®.

The first from a UK train operating company, which is worth in excess of £3m, is for the supply and installation of the systems to over 390 passenger vehicles and includes forward-facing cameras on two classes of locomotives.

The second contract placed by Hyundai Rotem of Korea, is for the supply of the systems for 90 carriages it is supplying to New Zealand’s Greater Wellington Railways, worth £800,000.

Petards chief executive Bill Conn said: “These contracts have been secured from important players in both the UK and worldwide transport sectors and we are delighted to have the opportunity to work with both of them.

“These are significant contracts for us and their award demonstrates the strong position that Petards holds within the rail industry and that customers value both the flexibility and rail-proven nature of our eyeTrain® product.”

Petards has been listed on the AIM market since 1997. It employs 110 staff and after rationalising its UK-wide operations in the UK in 2006, it is now based on the Team Valley trading estate.

The company also provides security and surveillance equipment for the police and defence industry, and its in-car police cameras are those used in TV shows like Police, Camera, Action.

It will announce its full-year results for 2008 next month, with turnover expected to come in around £18.8m. It made a pre-tax profit for the six months of last year of £305,000 – its first ever profit.

The company believes it is well-placed to enhance its overseas penetration, with exports currently around 20% of turnover, it believes the Korean win will be a platform for further growth

In 2008 Petards was unable to agree funding with its banks which resulted in its shares being suspended. The situation was resolved in the final quarter of last year and shares began trading again on December 19.

The company has now reduced its debt levels from £6m to £2.3m at the end of 2008.

Finance director Andy Wonnacott said: “We were one of the first companies to be hit when the banks stopped lending, but we are addressing these issues. We are a cash-generative business and we now have adequate debt facilities in place.”