Last checked at 26 Jun 2019 07:00
26 June 2019
Avingtrans Plc
("Avingtrans" or the "Company" or the "Group")
Trading Update and Notice of Results
Avingtrans PLC (AIM: AVG), which designs, manufactures and supplies original equipment, systems and associated aftermarket services to the energy and medical sectors, provides an update in respect of its financial year ended 31 May 2019 ("FY19").
Avingtrans is pleased to report a year of excellent trading progress; as a result of which, the Company anticipates that turnover, operating profit and Profit Before Tax for FY19 will be ahead of market expectations. The Group expects to report turnover of c.£104m, which includes c.£3m of adjustments arising from the impact of IFRS 15; being c.8% ahead of expectations on an adjusted basis. At the operating level, Avingtrans expects to report an operating profit of c.£5.8m (pre-exceptionals), being c.18% ahead of expectations when taking into account an uplift of £100,000 resulting from the impact of IFRS 15. Finally, when adjusted for the impact of certain restructuring costs, Avingtrans expects to report PBT (pre-exceptionals) of c.£5.2m; c.21% ahead of expectations.
The Group expects FY19 net debt to be c.£1.9m. This represents a material improvement in comparison to the expected year end position, reflecting receipt of certain contract payments earlier than expected and some capex delays; the phasing of which is expected to have a corresponding impact on the Company's FY20 net debt position. Taking this into account, the expected 'normalised' FY19 year-end net debt position would be c.£4.5m, which is nonetheless materially better than previous expectations.
The Group' has seen sustained development and improvement in performance of the Hayward Tyler ("HTG") business, acquired in September 2017, throughout the year. The Engineered Pumps and Motors division (EPM) has secured a number of key contracts, including over $3m to provide high temperature molten salt pumps in September 2018; a £10m contract with Vattenfall in Sweden for nuclear life extension equipment, won in February 2019 and over $6m to provide critical pumps and spare parts to nuclear reactors in the US and South Korea in April 2019. As part of the division's global business strategy and to support continued growth, Avingtrans opened a new state of the art factory in Kunshan, China in January 2019.
Avingtrans continues to benefit elsewhere from the integration of HTG, with Peter Brotherhood securing an order to supply steam turbines for a Floating Production Vessel worth £10m in March 2019 and joint initiatives between Peter Brotherhood and Metalcraft resulting in a contract with a UK Government agency worth £5m in June 2018. Other large contracts have progressed positively, including further deliveries to Sellafield Ltd for the three-metre-cubed 3M3 box production programme, relating to the storage of intermediate level nuclear waste.
A continued focus on aftermarket (AM) has resulted in almost half of all new orders being for AM opportunities across the Group.
Continuing its Pinpoint-Invest-Exit strategy, Avingtrans added a number of bolt-on acquisitions in the year, including Tecmag, Inc. in October 2018; adding expertise in Magnetic Resonance Imaging and Nuclear Magnetic Resonance systems to the Group's developing Medical division. In June 2019, the Company announced the acquisition of Bolton-based Booth Industries Limited, a leading UK engineering company, from the administrators of AIM-quoted Redhall Group plc, with significant read-across to the Group's Metalcraft operations.
Finally, Avingtrans is pleased to confirm it acquired US-based Energy Steel & Supply Co. (Energy Steel), an established manufacturer of machined products and components to the civil nuclear power industry, on 24 June 2019 for $1m. Hayward Tyler has over 600 pumps in active service in nuclear applications across the world and this acquisition expands the Company's nuclear capabilities and product lines for new and existing customers.
Avingtrans anticipates that these acquisitions, when taken together, will positively impact the Group's revenue forecast for FY20, with the impact on profitability expected to deliver in FY21 and beyond.
Notice of Results
Avingtrans will publish results for the twelve months ended 31 May 2019 on 18 September 2019.
The management team will be hosting a presentation for analysts on the day of results at 9.30am at the offices of Newgate Communications, Sky Light City Tower, 50 Basinghall Street, London, EC2V 5DE.
Steve McQuillan, CEO of Avingtrans, commented: "Avingtrans has had another solid year of growth across our core divisions and I am pleased to announce the Company expects turnover, operating profit and PBT to be ahead of market expectations.
"This is attributable to both the significant contract wins we have delivered on both sides of the Atlantic in the last 12 months and to the success of Pinpoint-Invest-Exit strategy. Importantly, the future looks bright for our business. The acquisitions of Tecmag, Booth Industries Limited and Energy Steel look set to position us strongly for the future and are anticipated to positively impact the Group's revenue forecasts for FY20, and profitability in FY21 and beyond."
Mike Turmelle, Managing Director of the Engineered Pumps and Motor Division, commented: "Hayward Tyler's vision, with the support of Avingtrans, is to bring world class products to the markets we are engaged in. The acquisition of Energy Steel is yet another example of us developing this vision as it further expands our nuclear capabilities and product lines for both new and existing clients."
Enquiries:
Avingtrans plc Steve McQuillan, CEO Stephen King, CFO
| 0135 469 2391 |
N+1 Singer (Nomad and Broker) Shaun Dobson/Lauren Kettle (Corporate Finance) Mia Gardner/Rachel Hayes (Corporate Broking)
| 020 7496 3000 |
Newgate Communications (Financial PR)Adam Lloyd Tom Carnegie | 020 7653 9850 |
About Avingtrans
Avingtrans designs, manufactures and supplies original equipment, systems and associated aftermarket services to the energy, medical and industrial markets worldwide.
Business units
Hayward Tyler - Luton & East Kilbride, UK and USA, China and India Specialises in the design, manufacture and servicing of performance-critical motors and pumps for challenging environments.
Stainless Metalcraft Ltd - Chatteris, UK and Chengdu, China |
Provider of safety-critical equipment for the energy, medical, science and research communities, worldwide, specialising in precision pressure and vacuum vessels and associated fabrications, sub-assemblies and systems.
Maloney Metalcraft Ltd - Aldridge, UK |
Designs, manufactures and services oil and gas extraction and processing equipment, including process plant for dehydration, sweetening, drying and compression.
Ormandy Group, Bradford, UK Design, manufacturers and servicing of off-site plant, heat exchangers and other HVAC (heating, ventilation and air conditioning) products
Peter Brotherhood - Peterborough, UK Specialises in the design, manufacture and servicing of performance-critical steam turbines, turbo gen-sets, compressors, gear boxes and combined heat and power systems.
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Composite Products Ltd - Buckingham, UK Centre for composite technology, parts and assemblies, serving customers in industrial markets.
Scientific Magnetics - Abingdon, UK Designs and manufactures superconducting magnet systems and associated cryogenic systems for a variety of markets including MRI and provides service and support for Nuclear Magnetic Resonance instruments.
Tecmag Inc, Houston, USA Designs, manufactures, tests and installs instrumentation, including full consoles, system upgrades, and solid-state probes, mainly for Magnetic Resonance Imaging (MRI) and Nuclear Magnetic Resonance (NMR) systems.
Crown International Ltd - Portishead, UK Designs and manufactures market-leading pole and support systems for roadside signage and safety cameras, rail track signalling and gantries.
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