(Alliance News) - Avingtrans PLC on Thursday said it was "delighted" by its performance in the year ended May 31, despite what it described as "difficult" market conditions, and announced its proposed acquisition of the remaining available stake in Adaptix Ltd.
The company said it has submitted a proposal in connection with the conditional acquisition of the remaining share capital of Adaptix for up to GBP3.0 million.
Avingtrans is a Cambridgeshire, England-based company which designs, manufactures and supplies critical components, modules, systems and associated services to the energy, medical and industrial sectors. Adaptix is a medical technology firm based in Oxford.
Avingtrans currently owns 667,333 shares in Adaptix. The total share capital of Adaptix is currently 3.7 million, meaning the company holds a roughly 18% stake.
The acquisition proposal has been accepted by the majority of Adaptix shareholders on a conditional basis. The company has, however, invited various other parties to submit a competing proposal for the entire business or its assets by July 21.
Should no superior offer be received, Adaptix will accept Avingtrans's proposal. The consideration will be satisfied through the issue of Avingtrans shares.
"There can be no certainty that the proposal will be accepted, even if the pre-conditions are satisfied or waived, or a superior offer for Adaptix emerges. In addition, Avingtrans has the ability to withdraw its offer at any time up to exchange of contracts, since the offer remains subject to the approval of the Avingtrans board," the company commented.
The company said its results for the year ended May 31 are expected to be in line with market expectations. Consensus, according to Avingtrans, sees full-year revenue at GBP108.9 million and adjusted earnings before interest, tax, depreciation and amortisation at GBP13.5 million.
In its last financial year, Avingtrans reported revenue of GBP100.4 million and adjusted Ebitda of GBP12.7 million. Consensus would represent growth of 8.5% and 6.3% year-on-year respectively, if achieved.
The company said the momentum from the end of financial 2023 has continued into financial 2024, with the order book currently at a "record" level for "this time of year."
"We are delighted by the performance of the group in what have been difficult market conditions, including on-going supply chain disruptions, albeit that these have eased somewhat from their nadir. Despite the headwinds, order intake has been robust, notably growth in Engineered Pumps and Motors has been particularly strong. As a result, we are pleased that the group is entering [financial 2024] with the best order cover since prior to the pandemic which leads the board to view the outlook for this year with confidence," said Chief Executive Steve McQuillan.
Avingtrans expects to publish its results for the year ended May 31 on September 27.
Shares in the firm were up 2.7% at 421.14 pence on Thursday in London.
By Heather Rydings, Alliance News senior economics reporter
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Avingtrans (AVG)