Exova eyes organic growth, sells FWP business

Exova expects modest full-year organic growth at constant currency rates and earnings in line with previous guidance, adjusted for the just-announced sale of its Food, Water and Pharmaceutical (FWP) business in the UK and Ireland.

"Given the strong pipeline, we expect our mergers and acquisitions programme to contribute significantly to overall growth," the materials-testing company said.

The FWP business sale -- to Eurofins Scientific for about £18 million cash -- allowed Exova to dedicate significantly more financial and management resource to growing in sectors where it could build on its market-leading positions.

These were in the technically demanding services such as Fire, Transportation, Aerospace, Industrials and Infrastructure related testing.

In a trading statement covering the four months to 30 April, Exova added that its revenue was up 12.7% at constant currency rates and up 15.4% at actual exchange rates.

It saw good organic growth in Aerospace and very strong growth in its Product & Certification cluster. "As expected, we have seen a further contraction in our Oil & Gas and Industrials cluster and some reduction in Health Sciences."

In the Americas, Exova saw solid organic growth in Aerospace, good growth in Health Sciences and a particularly high level of activity in Transportation, which was expected to return to more normal levels. The company's Oil & Gas and Industrials cluster had experienced similar headwinds to Europe.

In Rest of World, very strong organic growth had continued in the Middle East with the ramp-up of infrastructure projects. This was partially offset by the anticipated contraction in Oil & Gas and Industrials.

"We have continued to take action to mitigate the impact on margin in Oil & Gas and Industrials," Exova said in a statement.