Last checked at 4 Jun 2009 07:00
For immediate release 4 June 2009
Porvair plc ("Porvair" or the "Group")
Confirmation of banking arrangements and trading update
Porvair, the specialist filtration and environmental technologies group, today, announces the completion of its banking renegotiations and issues a trading update for the six months ended 31 May 2009.
Trading Update
In the six months ended 31 May 2009, the Group has traded in line with the expectations set out in the Interim Management Statement on 7 April 2009. The Group's UK and European operations have continued to trade well and the US operations have been more stable in the second quarter compared with the earlier part of the year. The Group has been cash generative, in line with expectations. Progress with new products has been encouraging.
The Microfiltration division, based in the UK and Europe, is trading well with the order book supported by account wins, new project work and currency benefits. Energy filtration demand remains strong, notably in gasification and nuclear remediation and we are pleased to have won several substantial new contracts in the nuclear market. Some aviation and general industrial order schedules have reduced but overall new projects have made up for any shortfall. Current trading at Seal Analytical is encouraging with the integration process now complete.
Trading in the US continues to be challenging but has been more stable in recent weeks. Sales rates in the Metals Filtration division are around 35% lower than the prior year. In response, employee numbers have been cut by 40% and salaries of remaining staff temporarily reduced. As previously announced, these actions will give rise to a one-off charge of circa £600,000 in the period and will reduce annualised ongoing costs in the Metals Filtration division by approximately £1.5m. Despite this upheaval, progress with new products that will underpin our US business recovery has been promising. Conversions to our new aluminium filter continue and the first shipments of our battery component have been made.
Including one-off costs, mostly US redundancies, the Group will incur a small operating loss in the first half of the year. Expectations of a stronger Group performance in the second half are underpinned by orders in the UK due for delivery later in the year and the much lower US cost base.
Banking Arrangements
Porvair has completed the renegotiation of its banking facilities with Barclays. The Board is satisfied that the revised banking arrangements will provide the flexibility to support the Group's future development. In summary, the revised arrangements include:
Reconfirmation of all of the existing facilities
Amendment of the Group's covenant arrangements
Revised margins on the facilities of between 2.75% and 3.25% above libor.
Porvair will be announcing its interim results for the six months ended 31 May 2009 on Monday 22 June 2009.
An analyst briefing will be held at 10.30 am at Buchanan Communications, 45
Moorfields, London, EC2Y 9AE on Monday 22 June 2009.
For more information, contact:
| Porvair plc | |
| Ben Stocks, Chief Executive | 01553 765 500 |
| Chris Tyler, Group Finance Director | 01553 765 500 |
| Buchanan Communications | 0207 466 5000 |
| Charles Ryland / Catherine Breen |
Notes to editors
Porvair is a group of specialist filtration and environmental technology businesses. Its products are used in a range of niche filtration markets, and are derived from its expertise in the development and manufacture of porous and microporous ceramics, metals, plastics and carbons.