SECURITY and surveillance technology firm Petards is to raise working capital with a share issue that could bring in up to £1.125m.
It announced the offering of around 4,500,000 shares in the AIM-listed, Gateshead-based business a week after it revealed that an attempt by its biggest shareholder to take over the company had collapsed.
Water Hall Holdings, which has previously attempted to prevent Petards raising capital by issuing shares, owns almost 30% of the company.
Petards said it was now in a better position to plan ahead with confidence after securing an £8m contract in the summer to supply its eyeTrain on-board digital CCTV systems.
It expects to start deliveries on the contract before the end of the year. However, the majority of deliveries will be from 2014 onwards until the contract’s completion in 2014.
Petards said in a statement yesterday: “Although the impact of the contract will be relatively limited in the current and next financial year, thereafter the contract will significantly underpin the company’s financial performance and its future prospects.
“As a result your board is now able to plan for the future with much more confidence. Therefore to further enhance the prospects of the company, the board believes it would be appropriate for the company to raise additional equity capital.
“The intention is that this would be undertaken by way of a pre-emptive open offer to existing shareholders.
“The specific purpose of the fundraising would be to raise additional working capital and to accelerate the company’s product development programme.”
But Petards also warned that although it has secured some of the orders it had been expecting in the last few weeks, they were not worth as much as it had been hoping.
“In addition other contracts we have been expecting to receive in the third quarter now seem likely to be delayed into 2013,” said Petards.
“As a result the board presently expects revenues in the second half year to be slightly ahead of those for the first half year and the operating performance to be similar to that achieved in 2011.”
The company is one of a number to be affected by the Government’s decision to put new rail franchise contests on hold while it investigates problems with the West Coast franchise.
Petards said: “The cancellation by the Department for Transport of the InterCity West Coast franchise procurement has also caused some short-term uncertainty.
“Despite this however, the company still expects the operating performance for the year to December 31, 2012, to be in line with current market expectations.”
It reported revenues of £12.1m and pre-tax profits of £215,000 last year.