By Najat Kantouar

Petards Group, the U.K. developer of advanced security and surveillance systems for the defense industry, experienced a decline in shares of 13% on Tuesday. The company reported a swing to a pretax loss, citing underwhelming performances in the rail and defense sectors.

At 1257 GMT, shares were down 0.88 pence at 6.0 pence.

For the six months ended June 30, Petards Group reported a pretax loss of £500,000 ($610,500), compared to a profit of £101,000 in the same period the previous year. Revenue also declined from £5.5 million to £4.4 million. The order book as of June 30 stood at £4 million.

The company attributed the decline in gross profit margin, which dropped from 49.3% to 47.3%, to higher material costs resulting from inflation.

Adjusted loss before interest, taxes, depreciation, and amortization (a company-preferred metric) was £59,000, compared to a profit of £606,000 in the previous year.

Chairman Raschid Abdullah stated that although the board is confident of an improved performance in the second half of the year, the company expects the full-year results to fall below current market expectations. However, Abdullah did not provide any specific figures.

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