Last checked at 11 Dec 2012 07:01
AVINGTRANS PLC - Trading UpdateAVINGTRANS PLC - Trading Update
PR Newswire
London, December 10
Avingtrans (AIM:AVG), a manufacturer of critical components and associatedservices to the global aerospace, energy and medical sectors is pleased toannounce an update on trading in light of the recent transactions completed bythe Group.
Summary of recent transactions (the "Recent Transactions")
On 5 November 2012, the Company announced the sale of Jena Tec, its Industrialdivision, for a cash consideration of £13.45m and we also set out a clearlydefined strategy focussed on the Group's two core divisions: Aerospace andEnergy & Medical.
In line with this strategy, the Company subsequently announced the acquisitionsof certain assets of PFW Farnborough ("PFW") for £1.85m (announced 16 November)and Aerotech Tubes ("Aerotech") for £2m (announced 26 November), which havepropelled the business into a leading position in Europe in the Aerospace pipesmarket.
The sale of Jena Tec, and the subsequent acquisitions described above, providesus with a more focused business, and a stronger balance sheet, which willenable us to invest in each of these businesses and pursue opportunities whichwe would otherwise have been unable to target. Consistent with this strategy,we will continue to seek further value enhancing acquisitions to build on theGroup's position in our core Aerospace and Energy & Medical divisions.
Outlook
2013 Financial Year
Sales Revenues for the year are expected to be in line with original Boardexpectations, with the loss of revenue replaced by revenue streams from PFW andAerotech in the second half of the 2013 financial year. However, in the shortterm, the margins realised from sales at PFW and Aerotech will not compensatefor the loss of margin in respect of Jena Tec, which will impact profitabilityfor the 2013 financial year.
The Group will realise an exceptional profit in respect of the disposal of JenaTec of approximately £8m and will incur exceptional costs of £0.35m in respectof the acquisitions of PFW and Aerotech.
Net debt for the full year will be materially lower than previous Boardexpectations, with the cash proceeds received from the disposal of Jena Tec,partially offset by the cash consideration in respect of the PFW and Aerotechacquisitions, further capital investment, particularly in respect of China, andthe immediate working capital requirements at PFW. However, we have chosen notto pay back all of the Group debt at this time - mortgages on properties andequipment leases being left mostly intact.
2014 Financial Year
The Board is confident that the Group will see both revenue and marginimprovement during the 2014 financial year, which will deliver resultsmarginally above previous Board expectations. Coupled with an improved and morerobust balance sheet, the Board believes that the recent transformationaltransactions place the Group in a much stronger position for the future, bothfinancially and strategically.
Interim dividend and results
Given the improved position of the Group, and to emphasise our confidence inthe future, the Board expects to reinstate an interim dividend of 0.7p when theCompany announces its results for the six months ended 30 November 2012.
The Company expects to release its interim results for the six months ended 30November 2012 in the week commencing 25 February 2013.
Enquiries:Avingtrans plc 0115 949 9020Steve McQuillan, CEOStephen King, CFONumis Securities Limited 020 7260 1000
David Poutney (Corporate Broking)
Richard Thomas (Corporate Finance and Nominated Adviser)
Newgate Threadneedle 020 7653 9850(Financial PR)Josh RoystonHeather ArmstrongAbout AvingtransAvingtrans plc is engaged in the provision of highly engineered components and services to the Aerospace, Energy and Medical markets worldwide.
The business is made up of 2 divisions:Aerospace, engaged in the manufacture of rigid pipe assemblies, fabricationsand prismatic components - both metallic and composite - for the globalaerospace market and precision polishing of aircraft components and;
Energy and medical, engaged in the manufacture of machined and fabricatedpressure and vacuum vessels and components for the energy, medical, science andresearch communities. Plus, design and manufacture of fabricated poles andcabinets for roadside safety cameras and rail track signalling.