Petards Group (AIM:PEG), the AIM-quoted developer of security, communications and surveillance systems, reported adjusted EBITDA of £781,000 for the six months ended 30 June, up more than 50% from £509,000 a year earlier.
Revenue slipped slightly to £7.7 million from £7.9 million, but gross profit margin rose to 52.2% from 48.7% as the business mix shifted toward higher-margin work.
The group returned to an operating profit of £14,000, reversing a £185,000 operating loss in the same period last year.
Cash generated from operations rose to £894,000 from £860,000, helping cut net debt to £1.16 million from £1.34 million at the end of December.
The diluted loss per share narrowed to 0.15p from 0.51p.
Rail and Defence led the improvement, with Rail order intake reaching its highest first-half level in over five years, including a £0.5 million eyeTrain retrofit contract followed by a further £0.7 million in orders announced in August.
Defence benefited from work starting on the £2.2 million Challenger 3 upgrade order secured last year from Rheinmetall BAE Systems, alongside margin contributions from repeat orders and engineering support work.
QRO's traffic enforcement business rebounded from a weaker second half of 2025, with revenue back in line with recent comparative periods and £0.4 million of orders from new export customers.
The order book stood at £9.6 million at the end of June, up from £9.2 million at the end of December.
"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," said chairman Raschid Abdullah.
News Intelligence what this means for the company
Petards swung to operating profit in H1 2026 on a 50% EBITDA jump to £781,000, driven by a shift toward higher-margin Rail and Defence work despite flat revenue. The Rail division posted its strongest first-half order intake in over five years, while Defence is now executing the £2.2 million Challenger 3 upgrade contract secured last year from Rheinmetall BAE Systems. Order book grew to £9.6 million, and management expects 'another significant improvement' in full-year results versus 2025.
The company has moved from loss-making to profitable on margin expansion rather than revenue growth, a structural shift that matters more than the absolute profit size. The order book provides near-term revenue visibility, but at £9.6 million it represents only 1.2× the H1 revenue run-rate—execution risk on converting orders to cash and sustaining margins remains material for a small-cap AIM stock.
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