Petards Group Reports 78% Revenue Growth and Improved Profitability in H1 2025

Petards H1 2025: 78% revenue jump, margins hold, losses narrow

Petards Group’s interim numbers show a business moving in the right direction. Revenue surged 78% to £7.9 million, gross margin held at 48.7%, and adjusted EBITDA swung up to a £509,000 profit. The company is still loss-making at the statutory level, but the operating loss narrowed to £185,000 and the post-tax loss halved to £312,000. Cash generation from operations was healthy at £860,000, helping trim net debt to £1.295 million.

The immediate drivers were a full six-month contribution from Affini (acquired last year), better underlying performance across the group, and first revenues from QRO’s new Harrier Mini ANPR camera. Management also points to improving momentum post-period, with fresh orders and multi-year frameworks that add recurring revenue and visibility.

Key numbers at a glance

Metric	H1 2025	H1 2024	FY 2024
Revenue	£7.9 million	£4.4 million	£12.0 million
Gross profit	£3.82 million	£2.16 million	£5.44 million
Gross margin	48.7%	49.0%	not disclosed
Adjusted EBITDA	£509,000	£33,000	£410,000
Operating loss	£185,000	£878,000	£1.27 million
Loss after tax	£312,000	£928,000	£1.13 million
Diluted EPS	(0.51p)	(1.63p)	(1.91p)
Cash from operations	£860,000	£438,000	£194,000
Net debt	£1.295 million	not disclosed	£1.535 million

Order book was £6.7 million at 30 June 2025 (31 Dec 2024: £7.1 million), with £4.8 million scheduled for H2 delivery.

What’s driving the improvement

Affini’s recurring revenue engine

Affini – the critical communications integrator acquired last year – delivered a “good performance” and slightly beat expectations. Higher-margin installation and engineering services helped, while its managed services, SaaS platforms (Affini Matrix and Radius), and 24/7 maintenance remain a strong recurring base.

Importantly, a multi-year customer framework has been renewed post-period to 31 December 2029, anticipated to generate in excess of £1.0 million per annum, with an option to extend to 31 December 2031. That is high-quality revenue that improves visibility and cash flow.

QRO ANPR: new products and overseas push

QRO’s Harrier Mini ANPR camera booked first revenues in Q2. The group has also hired an experienced international business developer and started building an overseas pipeline, attending several trade shows. Management is clear this will add overheads before it adds material sales, but it’s a sensible move given the size of global ANPR markets.

Post-June, Petards reports several larger orders across Rail, RTS and QRO totalling over £1.5 million, and multi-year frameworks for Affini and QRO together anticipated to generate annual revenues in excess of £1.25 million. That mix tilts the business further towards recurring and repeatable income.

Rail and RTS: stabilising and renewing

The rail market remains sluggish, with longer decision cycles and order placements. Even so, eyeTrain revenues recovered to near H1 2023 levels, helped by software for Automatic Selective Door Operation (ASDO). Margins improved and the division’s performance “much improved” versus last year.

After the period, two further rail orders over £0.7 million arrived – one for off-train video data transmission software and one for preparatory engineering to retrofit eyeTrain hardware to an existing fleet. The follow-on hardware order is expected to be placed, but not yet booked.

RTS (software for rail infrastructure) secured two significant licence renewals, in June and July, worth £0.7 million together, extending order book coverage into 2026. Another tick for visibility.

Defence steady, waiting on new programmes

Defence services delivered higher margins on flat revenue compared with H1 2024. The group is still awaiting movement on expected new MOD-related projects. That’s a potential H2/H1 2026 catalyst, but timing is uncertain.

Cash, debt and quality of earnings

Cash generation is a highlight. Operating cash inflow was £860,000, up from £438,000, with a £240,000 net increase in cash after investing and financing outflows. Net debt fell to £1.295 million (31 Dec 2024: £1.535 million), equating to gearing of 21.2% (31 Dec 2024: 24.0%).

Around 50% of group revenues are now recurring in nature – service and engineering support, spares, repairs and managed services. That mix usually dampens volatility and supports margins. The gross margin at 48.7% is strong for the sector and slightly ahead of H2 2024, albeit a touch lower than the prior year period.

Outlook and revenue cover: what management is signalling

The order book plus July/August wins provide revenue cover of around 92% for 2025, according to the board. Management still needs to “book and deliver further orders” in the final four months, but they remain confident of “a much improved trading performance” for the full year, in line with current market expectations.

In plain English: there’s decent visibility into H2, momentum looks better across multiple divisions, and losses are narrowing. Execution on the expected rail hardware order and continued order conversion in QRO/RTS will matter most from here.

Josh’s take: positives, watch-outs, and catalysts

Why this update is encouraging

• Strong top-line growth and a clean improvement in adjusted EBITDA.
• Cash from operations stepped up, helping reduce net debt.
• Rising recurring revenue – circa 50% of group sales – and multi-year frameworks (Affini renewal to 2029; combined frameworks expected to add over £1.25 million per year).
• New product traction at QRO (Harrier Mini) and a sensible push into international markets.
• RTS licence renewals of £0.7 million extend visibility into 2026.

What still needs proving

• Still loss-making at the statutory level; continued margin discipline and operating leverage are needed to tip into profit.
• Order book is slightly lower than year-end (£6.7 million vs £7.1 million), so H2 conversion and new wins remain important.
• Rail market remains slow; the expected hardware order for the retrofit project is not yet booked.
• Overseas ANPR build-out adds cost before it adds revenue – sensible strategically, but near-term profit drag.

Key catalysts to watch in H2 2025

• Conversion of the eyeTrain retrofit hardware order referenced post-period.
• Further QRO Harrier orders and any early international wins.
• Additional Affini and RTS contract renewals/extensions to deepen recurring revenue.
• Progress on the anticipated MOD-related programmes in Defence.

Jargon buster

• ANPR: Automatic Number Plate Recognition – camera systems that read vehicle plates for enforcement and security.
• SaaS: Software-as-a-Service – software sold on subscription, typically with recurring revenue.
• Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, plus excluding exceptional and acquisition costs – a proxy for operating cash profit.
• Revenue cover: The proportion of the year’s expected revenue already secured by the order book and signed contracts.

Bottom line

Petards’ H1 was solid: revenue up, EBITDA up, cash up, debt down. The mix is improving thanks to Affini and RTS, while QRO’s new products are beginning to land. The company still has to convert late-year orders and turn operating progress into statutory profitability, but the direction of travel is favourable.

For investors, this reads like a business getting back on the front foot, with higher visibility and several near-term catalysts. Keep an eye on contract conversion in Rail and overseas traction for QRO as the next tests.