Petards Group reported a significant improvement in first-half profitability, driven by better trading across its Rail and Defense operations, higher margins, and recurring revenues, strengthening the security, communications, and surveillance technology company’s performance.
Adjusted EBITDA increased more than 50% to £781,000 for the six months ended June 30, 2026, compared with £509,000 a year earlier.
Revenue was £7.7 million compared with £7.9 million in the first half of 2025, but improved operating efficiency helped lift gross profit margin to 52.2% from 48.7%.
The company also returned to operating profitability, reporting an operating profit of £14,000 compared with an operating loss of £185,000 in the prior-year period.
Cash generation remained strong, with £894,000 generated from operating activities compared with £860,000 a year earlier.
Net debt declined to approximately £1.16 million from £1.34 million at the end of 2025, strengthening the group’s financial position as it enters the second half.
Petards also improved its diluted loss per share to 0.15 pence from 0.51 pence.
The company’s Rail and Defence operations were important contributors to the improvement.
Order intake in both businesses has strengthened compared with recent years, allowing Petards to improve utilization and operational efficiency.
Those gains contributed to the higher group gross margin despite broadly stable revenue.
QRO also rebounded following weaker trading during the second half of 2025.
Recurring revenues made a strong contribution across all of Petards’ operations, providing an additional level of revenue visibility.
The company’s order book increased to £9.6 million at June 30 from £9.2 million at the end of 2025.
That backlog was subsequently supplemented by additional Rail orders announced in August, giving the group additional work entering the remainder of the year.
Petards operates across rail technology, defense services, traffic systems and wireless communications, giving the business exposure to several specialized infrastructure and security markets.
Management expects the improved operating trend to continue through the second half.
The group anticipates remaining cash generative and expects net debt to decline further by year-end.
The existing order book, improving margins and stronger order intake have also increased management’s confidence that Petards can deliver another significant year-over-year improvement in results.
The performance demonstrates that the company has been able to improve profitability even without meaningful top-line growth.
If Rail and Defence order intake continues at the stronger levels seen during the first half, Petards could benefit from additional operating leverage as more work moves through the business.
KEY QUOTES:
“The upward trend in the Group’s trading performance has continued into 2026, particularly in Rail and Defence where order intake has seen improvements over that of recent years. This in turn has driven greater operational efficiencies in those areas and improvements in gross profit margin.”
“We expect the Group to continue to generate cash in the second half, and for a further reduction in net debt by the year end. The board remains confident that the Group will perform well over the remainder of the year, and with the benefit of its current order book, it expects to deliver another significant improvement in its results over those achieved in 2025.”
Raschid Abdullah, Chairman of Petards Group
