Science Group on track to deliver full-year expectations

(Sharecast News) - Science Group said on Wednesday that it remained on track to deliver a resilient performance in 2026 in line with board expectations, despite geopolitical uncertainty and delays in UK defence contracting.

The AIM-traded international science, technology and engineering services group said revenue for the year was expected to be lower than in 2025, primarily because of reductions in previously reported low-margin activities in the defence sector.

It said that impact was expected to be offset by margin improvement.

Science Group said it had returned more than £24m to shareholders through buybacks and dividends since its 2025 annual general meeting.

As at 30 April, the group had cash of £68.5m and net funds of £57.2m, compared with cash of £20.9m and net funds of £9.0m a year earlier. Its £30m revolving credit facility, plus a £10m accordion, remains undrawn and runs to 2030.

In its Sagentia Services division, Science Group said most areas had seen some indirect effects from recent geopolitical instability.

The UK defence sector had been more challenging because of contracting delays linked to the deferral of the UK Defence Investment Plan, although the division overall remained well positioned for 2026.

The group said CMS2, which provides systems to critical operational submarine programmes, had been less affected by UK defence budget uncertainty, excluding irregular low-margin consumables orders.

It said CMS2 had progressed UK contracts in recent months which, if concluded, would position the business for growth and provide visibility into the 2030s.

Science Group said Frontier's core DAB+ and SmartRadio revenue remained relatively stable, although product mix had varied.

Shipments of Auria, its new connected audio product, began in April, with limited consumer availability expected in late summer.

However, the business remained cautious because of potential price inflation from memory chip costs and weak consumer electronics demand.

On capital allocation, Science Group said it had bought back 3,938,596 shares over the past year, equal to 8.8% of the share capital at the time of the 2025 AGM.

The board said it expected to continue the buyback programme and was asking shareholders at the 2026 AGM to consider increasing the buyback limit to provide additional flexibility.

The company said its balance sheet provided a strong foundation for its operating businesses and potential M&A or investment activity.

However, it added that its relative valuation as a London-listed company remained a constraint on its corporate ambitions.

Science Group said the board was continuing to consider all capital allocation options, including a potential increase in returns of capital to shareholders from existing cash resources if there was no material corporate or investment activity.

At 1032 BST, shares in Science Group were down 2.87% at 576p.

Reporting by Josh White for Sharecast.com.

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