Lower oil prices push revenues down at Avingtrans

The AIM-traded manufacturer of critical components for the aerospace, energy and medical sectors saw revenue reduce by 5% to £26.3m over the same period a year earlier.

Avingtrans said the residual year-on-year reduction was caused by an oil price decline, which was now fully absorbed.

Adjusted profit before tax increased by 38%, to £1.2m, with adjusted diluted earnings per share increasing to 3.4p per share from 2.9p per share in the first half of 2015.

Avingtrans used £0.5m cash for operations in the six months, compared to cash generation of £0.4m in H1 2015. Avingtrans' investment in capability and capacity reduced to £0.7m in the period, from £1.5m.

Net debt at the company marginally increased to £6.1m, from £5.9m, bringing the firm's gearing to 18%.

"Following last year's headwinds, we have now completed our restructuring programme with the Maloney manufacturing operations relocated to Chatteris and the Sigma operations relocated to Hinckley, which is now our pipe manufacturing centre of excellence," said Avingtrans chairman Roger McDowell.

He said the recent acquisition of Rolls-Royce's pipe production assets was driving momentum as the year progressed.

"Our full year revenues are expected to increase - due to second half weighting, especially in Energy and Medical," McDowell said.

"This confidence in the outlook for 2016 was boosted by the recent contract wins with Rapiscan and Bruker, thus underlining our continued dividend progression."

Avingtrans announced a 10% increase in its interim dividend to 1.1p per share.