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19 Nov 2014 07:00
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19 November 2014
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Exova Group plc
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Trading Update
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Exova Group plc (''Exova'' or the ''Group''), a leading international provider of technically demanding testing services, today releases its Trading Update for the period from 1 July 2014 to date. The financial results correspond to the ten month period from 1 January 2014 to 31 October 2014 compared with the corresponding period in 2013.
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Highlights
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Β· Underlying organic revenue1 growth at constant currency of 3.8% in line with expectations
Β· Total revenue growth on a constant currency basis of 4.0%
Β· Three bolt-on acquisitions and one disposal completed
Β· The Board expects full year underlying organic revenue growth at constant currency to be broadly in line with the year to date
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Ian El-Mokadem, Chief Executive Officer of Exova, commented:
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"Trading in the last four months has been consistent with our expectations at the time of the half year results. We have also continued to execute our acquisition strategy with the most recent addition of the Metallurgical Services business in India.
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"The medium term outlook for the Group remains positive and we continue to see opportunities to complement organic growth by extending the global reach of our business through new acquisitions and outsourcing agreements."
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Revenue growth for the ten months to 31 October 2014
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Growth (%) | ||
Constant currency | ||
Underlying organic 1 | 3.8 | |
Underlying adjustments | (4.2) | |
Organic 2 | (0.4) | |
Acquisitions | 4.9 | |
Disposals | (0.5) | |
Total | 4.0 | |
Currency effect | (6.7) | |
Reported | (2.7) |
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Trading in the period from 1 July 2014 to date
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In Europe, the Health Sciences and Product clusters continued to report good underlying revenue growth including the benefit of contract wins in Health Sciences. In addition, Oil & Gas and Industrials continued to see a strong requirement for technically demanding services offset by some softness in more routine testing. In the Aerospace cluster, although certain client delays and subdued demand affected performance in the first half of the year, we have subsequently seen a modest improvement.
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In the Americas, Oil & Gas and Industrials continued to show strong overall growth with technically demanding testing being particularly robust. Health Sciences also delivered overall growth. Progress in these clusters was largely offset by a general weakness in demand for certain types of testing for the Transportation sector and by weak demand and client specific delays in some Aerospace laboratories.
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In the Rest of World, growth moderated as anticipated in the Middle East cluster after a particularly strong first half of the year. Growth accelerated considerably in the Product cluster as we continued to see the on-going benefits of the investment we made in our Fire Testing business in Australia and strong demand for Fire Consulting services across the region.
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Acquisitions and disposals
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In addition to the acquisition of Catalyst Environmental in the UK in January 2014 and the calibration business of Raufoss Offshore in Norway in May 2014, the Group completed the acquisition of Metallurgical Services, a leading Oil & Gas and Industrials testing business in India, in July 2014.
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Following a strategic review of our small routine geological core testing and analysis business in Calgary, Canada, the business was sold on 7 November 2014.
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Outlook
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The Board expects full year underlying organic revenue growth at constant currency to be broadly in line with the year to date.
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Full year results
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The Group's full year results to 31 December 2014 will be announced on 4 March 2015.
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Notes:
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1) Underlying organic revenue is organic revenue adjusted for certain non-recurring items associated with a US transportation client within the Product cluster and for the discontinuation of certain food advisory services in the Health Sciences cluster in Europe.
2) Organic revenue growth at constant currency represents revenue growth at constant currency for each year excluding the growth attributable to acquisitions until the acquisition has been owned for a 12 month period and excluding the revenue attributable to disposals in the year of disposal and the preceding year, all at constant currency.
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Conference Call
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A conference call to discuss the Trading Update will be held on Wednesday 19 November at 9.00am (UK). Dial-in details are:
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UK: | 0844 800 3850 |
International: | +44 (0) 844 800 3850 |
Some locations may be unable to access the primary dial-in number. If you are calling from one of these locations, please use +44 (0) 208 996 3900 Β | |
Passcode: | 261 862 |
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Enquiries
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For investors, Exova Group plc Ian Power, Investor Relations | +44 (0) 131 476 7612 |
For media, Powerscourt Ian Middleton / Paul Durman | +44 (0) 20 7250 1446 |
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About Exova
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Exova is one of the world's largest dedicated testing groups, trusted by organisations to test and advise on the safety, quality and performance of their products and operations. Headquartered in Edinburgh, UK, Exova operates 118 permanent facilities in 23 countries and employs around 3,800 people throughout Europe, the Americas, the Middle East and Asia/Asia Pacific.
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Exova's capabilities help to extend asset life, bring predictability to applications, and shorten the time to market for customers' products, processes and materials. With over 90 years' experience, Exova specialises in testing across a number of key sectors from food and pharmaceuticals to aerospace, transportation, oil and gas, fire, engineering and construction.
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