SECURITY, defence and communications giant Petards is promising better-than-expected profits for 2011.

The Gateshead business reported that second-half revenues were better than the first six months of the year and it has achieved a 5% year-on-year revenue growth.

Petards, which supplies CCTV for trains and communications systems for the defence sector, said better margins, overhead savings and lower financing costs would boost its 2011 profits.

And its net debt has fallen from £1.8m at the end of June 30 to £1.5m by December 31, when its financial year ended.

Finance director Andy Wonnacott said: “It’s been a tough year. But it’s a combination of better-than-expected margins on a project and we’ve cut some other costs within the company.

“The Thameslink (train) project is proceeding and we are still in the frame to be the supplier of onboard CCTV but we’re not expecting any announcement immediately.”

The positive trading update comes after the company reported flat revenues of £5.2m for the first half of the year and its pre-tax profits slumped from £115,000 to £5,000, after a fire at its major supplier hit delivery of its transport products.

Petards, which doubled in size when acquired Joyce-Loebl Ltd in 2001, won a £2.5m Ministry of Defence contract to supply equipment to help protect military helicopters from being hit by guided missiles in October.

It is aiming to win additional defence work after the Government pledged to increase its military equipment budget this year.

Wonnacott said: “The equipment budget is positive but it’s not good news that BAE are effectively moving their fighting vehicle work down to Telford.”

At the start of the year, Petards appointed Tom Burwood as the new managing director of its Petards Joyce-Loebl business, following Bill Conn’s decision to step down from it and his joint role as group chief executive to become a non-executive director of Petards.