PTSG’s core markets are the provision of specialist services concerning safe operation largely in regulated building environments, particularly working at height, and the management of risk around fire, lightning and electrical installations and appliances. The efficient, national deployment of employed qualified field engineers using a proprietary integrated ERP system underpins the company’s service offering, financial model and industry position. It also forms a robust template for assessing and acquiring complementary businesses, which have subsequently generated significant uplifts in their profitability under PTSG’s ownership.

H118 saw another period of significant group progress for PTSG to record levels of revenue and profit. It included good organic growth and contributions from three FY17 acquisitions that are now fully integrated into the group. Strong momentum in Electrical Services and Fire Solutions comfortably carried temporarily quieter trading periods elsewhere to deliver 34% and 30% increases respectively in underlying PBT and EPS. A good underlying cash flow performance and a 13% increase in the interim dividend completed the H1 trading picture. 

PTSG’s share price performed strongly in 2017 (rising 23%) but in 2018 to date has largely traded between 170p and 200p; it is now sitting towards the lower end of this range. The company has a strong earnings growth record and our model generates a three-year EPS CAGR to FY20 of 9.0%. This results in the currentyear P/E of 15.9x becoming 14.3x in FY20, with EV/EBITDA moving from 12.8x to 9.8x. In our view, this anticipates faster growth and our analysis suggests our CAGR could double from reinvesting cash generated in acquisitions. By implication and subject to the right opportunities arising, the additional use of external debt and/or equity funding could accelerate growth further.