Avingtrans revenue 'stable' in first half

Energy and medical engineering company Avingtrans reported “stable” revenue for its first half on Wednesday, at £54.1m, compared to £54.3m a year earlier.

The AIM-traded firm said its gross Margin improved to 30.9% for the six months ended 30 November, from 25.6% a year earlier, while its adjusted EBITDA increased 36.6% to £6.3m.

Profit before Tax improved to £1.4m from £0.4m, and adjusted profit before tax grew to £3.5m from £1.8m.

Adjusted diluted earnings per share doubled to 10.0p from 5.1p, and cash inflow from operating activities totalled £1.1m, swinging from a £2.1m outflow in the first half of the 2020 financial year.

Net Debt pre IFRS 16 increased slightly to £7.8m, from £7.4m at the start of the period.

The Avingtrans board said it would reinstate the company’s dividend at the full year.

On the operational front, Avingtrans said energy revenues decreased by 1.3%, driven by Covid-19 delays, while profits in the energy divisions increased by 34.6%, driven by a recovery in EPM.

Aftermarket margin performance was continuing to improve across all business units, with the company’s ‘Sellafield 3M3’ three-metre-cubed box product described as “steady”, and meeting customer expectations.

It was expanding orders in the nuclear sector in the UK, the US and Asia, with the firm saying performance in the Ormandy Group operation was steadily improving, despite Covid-19 induced delays.

In hydrocarbons, the board said sales had been impacted by Covid-19, with a targeted restructuring implemented, while Booth and Energy Steel results were improved year-on-year, and recovering as anticipated.

In the period, Booth secured a contract for safety doors for the HS2 high-speed railway project, worth £36m, and post period end it secured an extension to another government contract, worth £2.9m.

The process to sell the HT Luton site was said to be underway.

In the medical division, Avingtrans said revenues and margins were flat, as the planned transition to new markets continued.

Post period end, it completed the merger of SciMag and Tecmag with Magnetica of Australia, and said work on compact MRI systems was now expanding, with new investment planned.

At the same time,the firm said it was now planning to exit third-party MRI component manufacture at Metalcraft.

Composite products performance improved in the period, with customers reportedly expanding.

“Avingtrans continues to make good progress during the pandemic and has proven to be resilient,” said chairman Roger McDowell.

“Following our PIE strategy, both Booth Industries and Energy Steel are continuing to improve since acquisition and the potentially transformational deal with Magnetica post period end is an exciting prospect for the medical division.

“The period result shows improving profits against flat revenues, once more demonstrating our agility, even in adversity.”

At 1104 GMT, shares in Avingtrans were up 0.97% at 313p.