Turbo Power Systems shares rocket as revenues rise

Turbo Power Systems shares soared in early Monday trading after the company announced an increase in revenues for 2012.

The firm, which designs and manufactures power solutions for aerospace, rail and industrial sectors, saw revenues grow 9.0% year-on-year to £15.7m.

The business benefited from government investments in infrastructure and rail and from demand for its products in oil and gas, defence and aerospace.

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However, the firm reported a loss before interest, tax, depreciation, amortisation and stock compensation of £6.3m, compared to a loss of £5.1m a year earlier, due to investment in headcount and restructuring of the senior management team.

As a result the group reduced its headcount from 235 in July to 176 in December, following a structural review of the company.

The order intake for the year came to £7.1m, a considerable drop from the £23m reported the previous year, as the company focused on securing higher margin contracts.

Nevertheless, operating cash outflow jumped to £7.4m from £6.3m.

Net indebtedness reduced to £5.2m from £7.5m through the May 2012 stock conversion by the company's subsidiary TAO Sustainable Power Solutions and the issue of £2.0m of new A-Shares.

Newly appointed Chief Executive Officer, Carlos Neves, said: "The year has been one of considerable change. During the second half we have focused on reducing our cost base, seeking to win contracts with attractive margins whilst entering into negotiations on current contracts to improve our terms.We have also leveraged our investment in operational capability, functional management, and infrastructure.

"I am pleased to report that the markets in which we operate are either stable or growing, while new opportunities in the rail, defence and oil & gas sectors are exciting and should provide the business with opportunities for sustaining revenue growth."

Shares were up 82% at 1.0p by 09:57.

RD