Avingtrans PLC on Wednesday said it delivered ‘robust’ results in its financial first half and is ‘cautiously optimistic’ about achieving full-year market expectations, while it is on the look out for acquisition opportunities.
Avingtrans provides components and systems for the energy, medical and industrial sectors.
For the half ended November 30, revenue came in at £45.1 million, down 7.4% year-on-year from £48.7 million. The drop was expected, as the company pivoted to making its own medical imaging products as it exits MRI component manufacturing.
Some delayed orders in Engineered Pumps & Motors also contributed to the decline, with revenue for the division down 13% year-on-year. Avingtrans expects this to resolve in the second half of the year, which ends on May 31, with the delayed orders pending or having been received since the end of November.
Profit before tax was £3.1 million, up 29% from £2.4 million year-on-year. On an adjusted basis, pretax profit had dipped slightly to £3.6 million from £3.7 million the year before. The rise in profit was aided by an increase in gross margin following planned cost reductions and improved project margins. Gross margin in the half was 34% up 190 basis points year-on-year from 32%.
Avingtrans share were down 5.9% to 402.10 pence each in London late Wednesday morning.
Avingtrans reinstated an interim dividend at 1.6 pence per share, following the suspension of payouts in 2020 as a result of Covid.
‘Our markets continue to evolve and strategic M&A opportunities remain a priority for us. Businesses like ours can command high valuations at the point of exit. Whilst the board remains vigilant, we are confident about the current direction and potential future opportunities across our markets,’ said Chair Roger McDowell.
‘Timing of contract revenue recognition has provided management with good visibility over H2 2022 revenue, despite some Covid-19 induced order delays and the board is therefore cautiously optimistic in achieving full year market expectations.’
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