REG - Avingtrans PLC - Interim Results
26/02/2025 07:00
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RNS Number : 4283Y Avingtrans PLC 26 February 2025
26 February 2025
Avingtrans plc
("Avingtrans", the "Company", or the "Group")
Interim results for the six months ended 30 November 2024
Avingtrans PLC (AIM: AVG), the international engineering group which designs,
manufactures and supplies original equipment, systems and associated
aftermarket services to the energy, medical and industrial sectors, today
announces its interim results for the six months ended 30 November 2024.
Financial Highlights
· Group Revenue increased by 21.2% to £79.0m (2024 H1: £65.2m) in line with
management expectations
· Gross Margin reduced slightly to 30.0% (2024 H1: 31.6%) resulting from OEM mix
in the AES division
· Adj.*EBITDA increased by 18.7% to £8.7m, as a result of higher revenues (2024
H1: £7.3m)
· Adj.*EBITDA margin reduced slightly to 11.0% (2024 H1: 11.2%), following the
anticipated investment in the Medical and Industrial Imaging division
· Adj. Profit before tax was stable at £4.5m (2024 H1: £4.4m)
· Adj. Diluted Earnings Per Share from continuing operations increased slightly
to 12.0p (2024 H1: 11.7p)
· Cash inflow from operating activities was much stronger at £4.9m (2024 H1:
outflow £3.6m)
· Net debt (excl IFRS16 debt) at 30 November 2024 of £8.9m, (31 May 2024:
£6.1m) due to:
- the investment in Slack & Parr ("S&P")
- ongoing investments in Magnetica and Adaptix; and
- a working capital outflow, mainly resulting from the increased revenue
· Interim Dividend of 1.9 pence per share (2024 H1: 1.8 pence)
*Adjusted to add back amortisation of intangibles from business combinations,
acquisition costs and exceptional items and discontinued operations.
Operational Highlights
Advanced Engineering Systems ("AES") Division
· First half revenue increased by 20.6% to a record £76.8m (2024 H1: £63.7m)
· EBITDA also increased strongly by 29.5%, to £11.0m (2024 H1: £8.5m), driven
by increased revenue
· Strong performance by Hayward Tyler, driven by rapid global growth in data
centre infrastructure and electrification of transport
· Positive progress made in the HT Inc $10.0m contract from TerraPower, for
novel nuclear pumps
· Ormandy also had a strong first half, as a beneficiary from energy hungry
deployment of AI and growth in data centres
· Metalcraft continues to ramp-up 3M3 box production and the waste storage
products for NRS (Magnox)
· Booth passed all tests for HS2 doors and (post period end) won an additional
£4.5m safety door contract
· The recovery at Slack and Parr remains on track, with new products launched in
the period
· Aftermarket momentum continues to build across the division
Medical and Industrial Imaging ("MII") Division
· Revenue increased modestly to £2.2m (2024 H1: £1.5m), as initial Adaptix
product sales commence
· LBITDA increased to £1.7m, as expected, as commercial ramp-up activities
continue (2024 H1: 0.6m)
· Adaptix appointed multiple initial distributors in the UK and the USA, across
the 3 addressable market sectors, with EU potential distributors also
identified
· Magnetica's first distributor, Televere Systems, is positioned for product
launch in the USA and discussions with prospective distributors in the EU have
also commenced
· Positive customer reactions at Radiological Society of North America, London
Vet Show and Farnborough International Airshow. Customers overwhelmingly
commend high quality of images
· Adaptix's NDT product, recognised for its high image quality, was awarded
"Innovation of the Year" by the Aerospace Technologies Institute, UK,
highlighting its groundbreaking impact on aerospace inspection
· Adaptix confirms ability to use existing, favourable reimbursement codes for
orthopaedic use in the USA
· The Adaptix Scottish facility is fully operational. Yield is steadily
improving
· Magnetica completing expansions in Brisbane and Houston, to facilitate volume
MRI system production
· Magnetica now expects to submit 510(k) approval in H2 of calendar 2025
· In the period, Magnetica started work on a new product concept for ViewRay®
Inc.
Current Trading & Outlook
· Order book in AES secured to achieve 95%+ of the FY25 market expectations,
providing strong visibility and confidence in meeting targets
· In addition, over £100m in orders have been secured for future financial
years
· 510(k) application for Magnetica expected to be submitted in the second half
of 2025
· The Board continues to be confident about achieving market expectations for
FY25.
Commenting on the results, Roger McDowell, Chairman, said:
"Another robust first half performance from the Advanced Engineering Systems
(AES) division propelled the Group to record H1 revenues, with AES also
registering a record H1 EBITDA, notably driven by global energy demand, in
turn driven by the underlying rapid global growth in datacentre infrastructure
and electric vehicles.
"We continue to invest in AES and even more so in the MII division. We are
well structured for future exits, intended to maximise shareholder value. The
commercialisation of the 3D X-ray systems at Adaptix, for applications in
orthopaedic, veterinary, and non-destructive testing markets, is proceeding to
plan, with sales now beginning to steadily ramp-up following the appointment
of multiple distributors. We are excited by the prospects for Adaptix. The
potential for the Magnetica compact helium-free MRI system is also bright, and
we are overcoming the sheer volume of time, effort and paperwork required to
satisfy the USA FDA, so that we can achieve our 510(k) clearance, to start
sales in the USA. We now expect to submit our application in the second half
of calendar 2025.
"Overall, our value creation objectives remain on course, supported by a
prudent approach to debt management, which the Board considers appropriate at
this time. However, given the dynamic nature of our markets, Avingtrans
remains committed to pursuing carefully selected M&A opportunities, as
well as marshalling our more mature businesses towards Exits, in line with our
PIE strategy. We remain optimistic about our prospects and the potential
future opportunities across our markets.
"We have solid visibility over the second half of FY25 revenue and profits,
thanks to an ongoing strong order intake and timely contract revenue
recognition. Therefore, the Board continues to be confident about the Group
expectations for the full year and views the future positively."
Enquiries:
Avingtrans plc 01354 692 391
Roger McDowell, Chairman
Steve McQuillan, Chief Executive Officer
Stephen King, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Broker) 020 7496 3000
Shaun Dobson
Alex Bond
Oliver Platts
IFC Advisory (Financial PR) 020 3934 6630
Graham Herring
Tim Metcalfe
Zach Cohen
About Avingtrans plc:
Avingtrans designs, manufactures and supplies original equipment, systems and
associated aftermarket services to the energy, medical and industrial markets
worldwide.
Business units
Hayward Tyler - Luton, East Kilbride & Nottingham, UK, USA, China and
India
Specialises in the design, manufacture and servicing of performance-critical
motors and pumps for challenging environments.
Energy Steel, Inc - Rochester Hills, Michigan, USA
Provider of custom fabrications for the nuclear industry, specialising in: OEM
parts obsolescence; custom fabrications; engineering design solutions; product
refurbishment; on-site technical support.
Stainless Metalcraft Ltd - Chatteris, UK
Provider of safety-critical equipment for the energy, medical, science and
research communities, worldwide, specialising in precision pressure and vacuum
vessels and associated fabrications, sub-assemblies and systems.
Booth Industries - Bolton, UK
Designs, manufactures, installs and services doors and walls which can be
tailored to be: blast and explosion proof; fireproof; acoustically shielded;
high security/safety; or combinations of the above.
Ormandy Group - Bradford, UK
Design, manufacturers and servicing of off-site plant, heat exchangers and
other HVAC (heating, ventilation and air conditioning) products.
Composite Products Ltd - Buckingham, UK
Centre for composite technology, parts and assemblies, serving customers in
industrial markets.
Adaptix Ltd - Oxford, UK
Adaptix has developed novel 3D X-ray for Orthopaedic and Veterinary
applications amongst others. Commercialisation of this system (and others) is
on-going.
Magnetica Ltd - Brisbane, Australia
Magnetica Limited specialises in the development of next generation MRI
technologies, including dedicated extremity MRI systems and MRI system
components. Magnetica has successfully built and tested a compact, integrated
3 Tesla orthopaedic MRI system, demonstrating clinical-quality imaging.
Commercialisation of this system (and others) is on-going. Magnetica's
structure now includes two other business units:
Scientific Magnetics - Abingdon, UK
Designs and manufactures superconducting magnet systems and associated
cryogenics for a variety of markets including MRI and provides services for
Nuclear Magnetic Resonance instruments.
Tecmag Inc - Houston, USA
Designs, manufactures and installs instrumentation, including consoles, system
upgrades, and probes, mainly for Magnetic Resonance Imaging (MRI) and Nuclear
Magnetic Resonance (NMR) systems.
Chairman's Statement
Whilst macro-economic events continue to pose challenges for many, I am
pleased to report a strong first half performance by Avingtrans. An improved
EBITDA result has once more accompanied a record revenue performance, compared
to H1 FY24, mainly due to higher revenue and profits in the AES division.
However, due to a higher level of OEM sales in the mix, the gross margin
decreased slightly year on year. Notwithstanding the significant additional
investments in Magnetica and Adaptix our net debt position remains well under
control.
Order cover for the remainder of FY25 remains healthy and important new orders
were booked in recent months, including a new £4.5m order at Booth for
additional security and safety doors, for the HS2 high speed rail project.
Our well-established Pinpoint-Invest-Exit ("PIE") strategy continues to bear
fruit, with the more recent acquisitions of Slack and Parr (S&P) and
Adaptix (both completed in 2023) recovering to plan and with both having
exciting prospects. Indeed, our medical imaging strategy is making significant
progress. At Adaptix, we have now reached the position where multiple
distribution partners are being signed up in the UK, the USA and elsewhere, as
the commercialisation phase of our plans gathers momentum, with an innovation
award and customer plaudits providing encouragement to the Team. Meanwhile, at
Magnetica, we are also making good headway in finalising the design and build
of our proprietary compact helium-free MRI product for the orthopaedics
market. However, our excitement here is somewhat tempered by the sheer volume
of time, effort and paperwork required to satisfy the USA FDA, to achieved
510(k) clearance to sell the systems in the USA. Whilst it is early in its
recovery cycle, the signs are also positive for S&P so far, with new
products being launched in the period, to bolster future prospects.
Our divisional management teams have once again exhibited resilience and
strategic focus in navigating the challenges of global markets. Progress in
our aftermarket initiatives for AES remains strong, where we aim to outperform
competitors by securing a larger share of the total installed base of service
and support business, both for our products and third-party offerings. We
remain focused on maximising the revenue opportunities arising from
aftermarket access, both from our own businesses and through strategic
partnership deals.
The AES division delivered a strong first-half, with revenue up by 20.6%
year-on-year. Divisional EBITDA improved significantly, up by 29.5%
year-on-year, with Hayward Tyler and Ormandy notably producing very good
results. The Sellafield 3M3 box contract continues to progress in the second
phase at Metalcraft, with a steady monthly delivery of boxes, and the contract
for Nuclear Restoration Services (NRS) is also in production. As well as the
new HS2 order, Booth completed all of the endurance tests for the HS2 cross
tunnel doors and will move into volume manufacture of these during this year.
Following another solid performance by the Group, the Board is announcing an
increase of c6% in the interim dividend to 1.9 pence per share, reflecting our
on-going pledge to deliver long-term shareholder returns. This decision is, as
usual, fortified by our positive outlook on Group prospects and supported by
our prudent fiscal position.
As ever, the other members of the Board and I express our gratitude to all
Avingtrans employees for their fortitude and resilience during another
challenging but rewarding period. We approach the future with considered
optimism and enduring enthusiasm for the enticing prospects ahead.
Roger McDowell
Chairman
25 February 2025
Note 1: A 510(k) is a premarket submission made to the FDA in the USA, to
demonstrate that the device to be marketed is safe and effective.
Strategy and business review
Group Performance
Avingtrans has a proven Pinpoint-Invest-Exit (PIE) business model, which
drives improvements in design, original equipment manufacturing (OEM) and
associated aftermarket services, affording the Group a strong margin mix, both
in the near and longer term. The Group has progressively shifted to a
product-based strategy over time, away from simply being "build to print". Our
Advanced Engineering Systems division forms the bulk of Avingtrans'
operations. Effective longer-term development of the Group's nascent Medical
and Industrial Imaging division is also a core focus for management, to create
enhanced shareholder value.
Strategy
Avingtrans is an international precision engineering group, operating in
differentiated, specialist markets, within the supply chains of many of the
world's best known engineering original equipment manufacturers (OEMs), as
well as positioning itself as an OEM to end users. Our core strategy is to
build market-leading niche positions in our chosen market sectors - currently
focused on the Energy, Infrastructure and Medical sectors. Over the long term,
our acquisition strategy has enabled our businesses to develop the critical
mass necessary to achieve such leading positions in our markets.
Our strategy remains consistent with previous statements. The Group's
unrelenting objective is to continue the proven strategy of "buy and build" in
regulated engineering markets, where we see consolidation opportunities,
potentially leading to significantly increased shareholder returns over the
medium to long term. At the appropriate time, we will seek to crystallise
these gains with periodic sales of businesses at advantageous valuations and
return the proceeds to shareholders. We call this strategy PIE -
"Pinpoint-Invest-Exit". Previous transactions, such as the disposal of Peter
Brotherhood in 2021, have clearly demonstrated the success of this approach,
producing substantial increases in shareholder value. We have built strong
brands and value from smaller constituent parts and we have demonstrated
well-developed deal-making skills and prudence in the acquisition of new
assets.
The Board continues to focus on improvements in Hayward Tyler's operations,
along with driving the performance of Booth, Ormandy, Metalcraft and Slack and
Parr. This programme is progressing to plan. We are also focused on the
opportunity to transform the Medical and Industrial Imaging division's
performance, via novel MRI products at Magnetica, as well as novel 3D X-ray
systems at Adaptix. The objective for the Group is to become a leading
supplier in our targeted energy, infrastructure and medical markets, of
mission critical products and services, with a reputation for high quality and
delivery on-time and on-budget. The Group has production facilities in its
three key geographical regions (the Americas, Asia and Europe) with lower cost
facilities in Asia (where appropriate) and product development and realisation
in the UK, the USA and Australia. The Group will continue to invest in
breakthrough and disruptive technologies in its chosen markets.
Avingtrans' primary focus in Energy is the nuclear sector - harvesting
opportunities in decommissioning, life extension and next generation nuclear
markets. We are also engaged with a variety of niches in the renewable energy
sector. The management will also continue to build on our footprint in the
wider power and energy sectors.
In parallel, the focus of the Group's Medical Imaging division ("MII") is to
become a market leader in the production of compact, superconducting,
cryogen-free MRI systems, targeted at specific applications including
orthopaedic imaging and veterinary imaging. Production of certain existing
products continues to support the division overall. This division now consists
of Magnetica in Australia (the majority stake was acquired in January 2021)
which operates as one business unit with Scientific Magnetics, UK and Tecmag
in the USA. More recently, we have sought to further strengthen our medical
imaging strategy, via investment in Adaptix, in Oxford and Edinburgh, UK.
Adaptix specialises in 3D X-ray technology, with the main target markets being
orthopaedic and veterinary imaging, as well as products targeted at
Non-Destructive Testing - eg for aerospace applications.
Our businesses have the capability to engineer products in developed markets
and to produce those products partly, or wholly, in low-cost-countries, where
appropriate. This allows us and our customers to access lower-cost sourcing at
minimum risk, as well as positioning us neatly in the development of Asian
markets for our products. Hayward Tyler is well established in China and
India, providing integrated supply chain options for our blue-chip customers.
A central strategic theme for Avingtrans is to proactively nurture and grow
the proportion of our business stemming from aftermarket. We are targeting
both our own installed base and the wider competitive installed bases of such
equipment, in areas where we can offer an advantage to our end-user customers.
This focus now applies mainly to our AES division, with the MII division
having pivoted to novel medical imaging products and services.
Energy and Infrastructure - Advanced Engineering Systems ("AES")
For Hayward Tyler ("HT"), the main priorities remain to strengthen its
aftermarket capabilities and to maximise opportunities in the nuclear life
extension market. HT was again able to deliver a robust result in H1, with a
strong order book and encouraging prospects for the year ahead.
At HT Luton, aftermarket activities remain the focus, including the servicing
of third-party equipment. The follow on £3m contract in Sweden with
Vattenfall for the Forsmark plant (for nuclear life extension) is progressing
to plan. Further defence orders have also been received from Rolls Royce and
other defence prime contractors. Hydrocarbon related orders from the North Sea
sector remained stable. We have paused the sale of the Luton site for now, due
to other priorities for the business in the near term.
The HT Fluid Handling business in Scotland had a solid first half performance.
The business has maintained a strong order book and the Transkem industrial
mixers business contributed positively.
HT Inc in Vermont (USA) continues to see solid order intake in the nuclear
life extension market in the USA. HT Inc's new R&D opportunities in next
generation nuclear power have made good progress, with the $10m design and
development TerraPower contract progressing well.
HT Kunshan (China) has developed a very strong order book, including an
improving position in the aftermarket business, with new orders coming from
Chinese electricity producers working on reducing the environmental impact of
electricity production, as well as increased demand driven by data centres.
In India, the local team again delivered a solid H1 performance, with a
stronger H2 in prospect.
Energy Steel ("ES") in Michigan (USA) had a weaker first half, but prompt
action by management promises to deliver an improved position in the remainder
of the year.
Metalcraft continues to progress with Phase 2 of the Sellafield 3M3
("three-cubic-metres") box contract and with the Nuclear Restoration Services
(NRS) contract, which is up and running. Timing for the next follow-on 3M3 box
contract tender from Sellafield, expected to be worth over £900m, remains
uncertain.
Ormandy's performance again improved year on year and order intake remains
strong, with aftermarket sales building. The acquisition of HEVAC and HES at
the start of 2023 has sustained the performance improvement.
Booth Industries had a solid first half. Booth has a very strong order book,
including the £36m order for HS2 cross-tunnel doors. Post period end, a
further £4.5m contract for safety doors was secured from HS2. Booth has now
completed the endurance testing of the HS2 tunnel doors and production of
these will commence in 2025.
Composite Products had a decent first half performance, boosted by new orders
from its largest customer, Rapiscan.
Slack and Parr's recovery continues, although it had a somewhat lower order
intake in H1 due to delayed customer projects. However, new product launches
in the period are expected to boost prospects in the remainder of the year.
Medical and Industrial Imaging ("MII")
Magnetica, Scientific Magnetics (SciMag) and Tecmag continue to make good
progress on our exciting development of compact, superconducting, helium-free
MRI systems entirely in-house. Prospective customers have been favourably
impressed by the image quality produced by the prototype systems. However, we
are working hard to overcome the significant volume of time, effort and
paperwork required to satisfy the USA FDA, which is now expected in the second
half of 2025. In the period, Magnetica started work on a new product concept
for ViewRay® Inc. ViewRay manufactures world leading MRI-guided radiation
therapy systems that can image and treat cancer patients simultaneously. This
partnership has the potential to be an important new business stream for
Magnetica in the coming years.
Our initial estimate of the addressable orthopaedic imaging market is circa
£1.7bn p.a. (by 2030). This is assuming a capital sale model. Our intended
longer term "pay per scan" business model could result in a significantly
larger opportunity. It is more difficult to quantify other potential market
segments (e.g. veterinary imaging) at this stage because equivalent, dedicated
products do not exist. We believe that materially reducing the size and total
costs of these dedicated MRI systems, coupled with them being much easier to
set up in a variety of locations, as well as increasing the scan rate by up to
300%, will produce a compelling sales proposition. This has recently been
ratified by interest from Key Opinion Leaders at various trade shows,
including the prestigious Radiological Society of North America conference, in
Chicago. In addition, these specialist systems may free-up capacity on the
existing MRI system installed base, which should be a major benefit to
healthcare organisations.
SciMag and Tecmag will rebrand in due course, to present a seamless image for
the business. However, there is still merit in continuing with various
existing products and services at SciMag and Tecmag, so long as they do not
detract from our core vision for MRI, which holds out the prospect of
materially increasing the value of Magnetica over the coming years. Orders for
existing SciMag and Tecmag products were solid in the period.
Meanwhile, at Adaptix, multiple distributors have been appointed, mainly in
the UK and the USA so far, to build the sales channels for the orthopaedic,
veterinary and non-destructive testing (NDT) products. Initial product sales
were secured in the period and we expect the volume to grow steadily in the
second half. We estimate that the Total Addressable Market value of these
three segments is $6.8bn pa.
The image quality and portability of the Adaptix products has also been
impressing prospective customers, with the NDT product being recognized for
its high image quality, via the award of "Innovation of the Year" by the
Aerospace Technologies Institute in the UK, highlighting its potentially
groundbreaking impact on aerospace inspection.
The facility in Scotland is now fully equipped and up and running with wafer
yields steadily improving. In the period, Adaptix also signed an agreement
with a sub-contract assembly and test partner, in Scotland. This partnership
will provide the volume build capacity to ramp-up production, as sales volumes
grow.
The strategies of Magnetica and Adaptix are convergent and we see potentially
large benefits in combining their approaches to market in technology, software
and distribution channels amongst others.
Markets - Energy
There has been a steady resurgence in global energy demand growth in recent
times. This is being driven in no small part by the increasing energy
consumption by data centres and the transition to electric vehicles.
End User/Aftermarket
Operators and end-users seek a combination of agile local support and a
reliable path to equipment upgrades and modernisation. Particularly in Western
economies, where facilities exceed their intended design lifespans, there is a
notable demand for solution providers within the supply chain to establish
partnerships with end-users. The Avingtrans AES division is strategically
positioned to thrive in this market space, focused on collaborations with
end-users.
Nuclear
Due to the Russia/Ukraine conflict and other energy demand drivers noted
above, global government perspectives on nuclear power have experienced a
resurgence, emerging resiliently from prior concerns about energy security.
The majority of opportunities for new builds exceeding 1GW are presently
concentrated in Asia, with more limited prospects in the UK and elsewhere.
Nonetheless, certain market segments remain robust, including the support of
operational fleets, life extensions, decommissioning, and reprocessing.
Our focus is now on the long-term development of next-generation technologies,
such as Small Modular Reactors ("SMRs") and Advanced Generation IV Reactors,
exemplified by our collaboration with TerraPower in the USA. The nuclear
market suffers from a consolidating supply chain and a scarcity of expert
knowledge. The USA has the largest civil nuclear fleet globally. Coupled with
the presence of heritage Westinghouse technology in Europe and Asia, this
positions our Hayward Tyler business units well for further growth. Addressing
obsolescence and life extension is crucial for nuclear operators and the AES
division is well-equipped to support operators in managing this risk.
The UK maintains a leading role in decommissioning, characterised by
innovative technology and substantial expenditure. Our Group plays a pivotal
role in the future manufacture of waste containers for Sellafield and Nuclear
Restoration Services ("NRS"), anticipating continued expansion in the UK and
global markets over the long term.
Power Generation
The global trend towards electrification persists, directing an increasing
share of primary energy toward the power sector, a central focus within the
Group's engineering division. Apart from nuclear, key sub-sectors encompass:
Coal: The Group continues to witness robust aftermarket activity from
coal-fired power stations. Opportunities persist in regions such as India,
China, Southeast Asia, Eastern Europe, and the Middle East. Hayward Tyler is
actively diversifying its product applications, such as the introduction of
Selective Catalytic Reduction (SCR) systems, aimed at reducing emissions from
power stations.
Gas: The growing market for natural gas, particularly in the form of combined
cycle gas turbine power plants, is predominantly observed in the West. The
Group has a modest position in this market, with existing product lines.
Renewables: The global market for renewable technologies and their associated
infrastructure is expanding significantly. The Group possesses products
applicable to some parts of this market segment. Furthermore, the Group's
expertise can be leveraged to develop new products, including innovations like
molten salt pumps for concentrated solar power applications.
Hydrocarbons
Oil demand picked up following both the pandemic easing and then being driven
by the Russia / Ukraine conflict, despite some weakness in the Chinese
economy. Although the UK is retreating from oil and gas production, activity
continues apace in other parts of the world. As a result, new capital
expenditure in the sector remains steady and we continue to see momentum
building in aftermarket orders.
Markets - Medical
The Diagnostic (medical) and molecular imaging markets are large global
sectors, dominated by a few large systems manufacturers. The total Medical
Imaging Market is expected to reach $55.4 billion by 2030 according to Grand
View Research, a compound annual growth rate of 4.9%. The largest market is
the USA, followed by Europe and Japan. The fastest growing markets are China
and India.
In the period, we continued to invest in Magnetica and Adaptix. The objective
of this activity is to create innovative, niche MRI and X-ray systems
suppliers, which can address specific parts of the market, not well served by
dedicated products at present. This includes orthopaedic and veterinary
imaging. The development paths of Magnetica and Adaptix are convergent, which
enables both businesses to benefit from efficiency and cost gains, as well as
optimising the route to market. Market drivers for these segments include an
ageing global population, the rising incidence of chronic diseases and
increasing companion animal ownership.
The growing prevalence of chronic diseases, especially in older populations,
is increasing demand for medical imaging in hospitals and other diagnostic
settings. Technical innovations, including advances in artificial
intelligence, have increased the reliability and accuracy of medical imaging,
thus driving further demand in global healthcare. Conversely, the market is
somewhat inhibited by the high cost of current medical imaging systems.
In 2024, X-ray systems held approximately 32% of the market share, while MRI
systems accounted for around 18%. Our estimates indicate that over 20% of all
diagnostic imaging scans are related to limbs. As a result, the combined total
addressable market for Magnetica and Adaptix in medical imaging is
approximately $3 billion, in theory. However, it is important to note that the
actual addressable market is likely smaller, since both businesses have chosen
not to target sales to hospitals. Instead, they are focusing on deploying
their products in specialised clinics, where the product attributes align
closely with the specific needs of these establishments, for imaging at the
point of care.
Additionally, both Magnetica and Adaptix have plans to expand into other
imaging markets, notably the veterinary sector. This is in response to the
lack of dedicated products in this area, which has hindered the widespread use
of imaging systems in veterinary practices. By targeting these specialised
markets and addressing their unique requirements, both companies aim to
further grow their market share and create a disruptive impact in the medical
and veterinary imaging industries. Significantly, our strategy is to attack
the markets in smaller "point-of-care" locations, where the main players (eg
GE and Siemens) are not present, since they are generally focused on whole
body systems located in hospitals. Our system designs allow customers to
eliminate circa 90% of the infrastructure costs, which severely limit where
whole body systems can be sited.
End User/Aftermarket
The MRI market segment is dominated by a handful of manufacturers, including
GE, Siemens, Philips and Canon, who account for circa 80% of revenue globally.
These players also dominate the aftermarket. Magnetica and Adaptix are not
present in the MRI aftermarket yet, but both will naturally service the
aftermarket for their own products.
Infrastructure and Security
Global safety and security concerns, as well as risk mitigation on large
infrastructure projects, are key drivers for growth at Booth and we are
cultivating these opportunities carefully. Thus far, the vast majority of
Booth's sales are in the UK but the business is building up a prospect
pipeline overseas. We have also continued to build the aftermarket order book,
with good prospects.
Threat detection standards for baggage handling at airports and package
scanning have been tightened everywhere around the world - especially in
Europe and the USA. With many millions of bags and packages flowing across
border crossings every day, screening devices have to comply with threat
detection standards without impacting throughput. Rapiscan, the biggest
customer for Composite Products, is a market leader in this sector, whose
presence is increasing as new standards are rolled out.
Adaptix is exploring various possible security applications of their 3D X-ray
technology products as inspection tools in various Non-Destructive Testing
(NDT) markets, such as aerospace, with an estimated addressable market of
c$1.4bn.
Financial Performance
Key Performance Indicators
The Group uses a number of financial key performance indicators to monitor the
business, as set out below. The Company publishes more detailed and
operational KPIs in its annual report. The figures relate only to continuing
operations.
Revenue: increase year on year largely driven by additional business at
Hayward Tyler
Overall Group revenue increased by 21.2% to £79.0m (2024 H1: £65.2m) driven
by additional business at Hayward Tyler.
Gross margin ('GM') - saw a modest reduction, primarily due increased OEM mix
GM decreased to 30.0% (2024 H1: 31.6%), primarily a result of the increased
level of OEM business.
Profit margin: EBITDA increase driven by increased revenue.
Adjusted EBITDA (note 4) increased by 18.7%, to £8.7m, (2024 H1: £7.3m)
mainly due to increased revenue and profit in the AES division, in turn driven
by improved results at Hayward Tyler and Ormandy. However, this was somewhat
restrained by the commercialisation costs at Adaptix and Magnetica in the
period.
Tax: future profits and cash still protected by available losses
The effective rate of taxation at Group level was a 11.8% tax charge. A tax
credit in the US and the use of Group losses in the UK kept the rate lower
than expected overall. The Group tax position will continue to be aided in
the coming years by the utilisation of historic losses available in the UK and
US.
Adjusted Earnings per Share (EPS): steady improvement.
Adjusted diluted earnings per share from continuing operations increased
slightly, to 12.0p (2024 H1: 11.7p), notwithstanding the continuing planned
investments in the Medical division.
Basic and diluted earnings per share from continuing operations increased by
16% to 10.2p (2024 H1: 8.8p) and 10.0p (2024 H1: 8.6p), reflecting no
acquisition costs in the period.
Funding and Liquidity: net debt position remains well under control.
Net debt increased to £8.9m, excluding IFRS16 debt (31 May 2024: £6.1m),
with the main driver being the on-going planned investments in Magnetica and
Adaptix. Cash inflow from operating activities in the period was £4.9m (2024
H1: outflow £3.6m).
Dividend: interim dividend progressively increased.
The Board is continuing with its policy of gradual increases in dividends. The
dividend is 1.9 pence per share (2024 H1: 1.8 pence). The dividend will be
paid on 27 June 2025, to shareholders on the register as at 30 May 2025.
ESG (Environmental, Social, and Governance)
Avingtrans is endeavouring to attain a high level of clarity on ESG matters.
We will be reporting on this task more fully, in our next Annual Report.
However, we comment on some ESG related matters below, to keep our investors
informed.
People
There were no personnel changes at Board level. At divisional management
level, the teams have also remained stable.
Despite a currently tight labour market in the UK and the USA, we continue to
strengthen the management teams in the individual business units, with further
appointments being made in the period and with an on-going emphasis on
aftermarket opportunities, where applicable. Whilst skills availability is
always challenging, we do not expect to be materially disadvantaged in the
market. We continue to invest significant effort in developing skills and
talent, both through structured apprenticeship programmes and graduate
development plans, across a number of business units. For example, the
apprentice training school based at Slack & Parr in Kegworth, UK has been
reinvigorated since the acquisition. The Group continues to be recognised
nationally for the strength of its apprenticeship training schemes.
Sustainability
We have developed a robust governance structure which supports proactive and
collaborative working aimed at addressing Environmental, Social and Governance
(ESG) risks and opportunities across the Group.
Our approach to sustainability is aligned with the UN's Sustainable
Development Goals (SDGs) and our priorities are:
- Health, safety, and wellbeing
- Operational eco-efficiency
- Development of cleaner technologies
Health, safety and wellbeing
We are dedicated to achieving excellence in Health, Safety, and Environment
(HSE) by embracing proactive, preventative measures that benefit every
employee. Our diverse acquisitions give us the unique opportunity to share and
integrate best practices, whether elevating local processes in smaller
acquisitions or learning from the well-established HSE systems in our larger
businesses.
We are proud to see positive trends in incident reporting and near-miss
feedback across the Group, and we actively encourage our employees to come
forward with ideas that drive continuous improvement. Regular safety walks and
routine inspections play a key role in our preventative strategy, helping us
identify opportunities to further enhance workplace safety.
At Board level, Les Thomas oversees HSE matters, conducting inspections and
reviews with local management. Together, we are committed to fostering a safe,
supportive, and innovative work environment for everyone.
Operational eco-efficiency
We are pleased to report continued progress against our intensity metrics
across the Group. Within our Advanced Engineering Systems division, we are
pleased to report that our operational eco-efficiency initiatives are yielding
positive results. On a like-for-like basis, the tCO2e per £m of revenue has
fallen from 16.7 in FY23 to 16.3 in FY24, reflecting our ongoing commitment to
energy reduction and improved process efficiency. In the Medical &
Industrial Imaging (MII) division, tCO2e per employee has decreased from 3.4
in 2023 to 2.9 in FY24.
Looking ahead, we will concentrate our efforts on enhancing efficiency across
our newer acquisitions, particularly with Slack & Parr, which is a more
energy-intensive business. By extending our proven eco-efficiency strategies,
we are confident in our ability to deliver further improvements and continue
our commitment to sustainable operations.
Development of cleaner technologies
In the Advanced Engineering division, our commitment to cleaner technologies
is highlighted by our pioneering work in next-generation nuclear systems. We
are actively collaborating with TerraPower to develop high-performance pump
systems tailored for their Molten Chloride Fast Reactor, a core component in
their state-of-the-art Integrated Effects Test facility. This innovative
reactor design not only promises enhanced safety and efficiency but also
represents a significant step forward in sustainable nuclear energy.
In our Medical and Industrial Imaging division, we are advancing Magnetica's
innovative compact Magnetic Resonance Imaging system that operates without
helium. This breakthrough addresses the challenge of helium scarcity, as
helium is a non-renewable resource primarily obtained as a byproduct of oil
extraction. Our development work is proceeding as planned, and we expect to
submit FDA 510(k) approval in 2025.
Social Responsibility
The Group maintains the highest ethical and professional standards across all
of its activities and social responsibility is embedded in operations and
decision making. We understand the importance of managing the impact that the
business can have on employees, customers, suppliers and other stakeholders.
The impact is regularly reviewed to sustain improvements, which in turn
supports the long-term performance of the business. Our focus is to embed the
management of these areas into our business operations, both managing risk and
delivering opportunities that can have a positive influence on our business.
The Group places considerable value on the involvement of its employees and
has continued to keep them informed on matters affecting them directly and on
financial and broader economic factors affecting the Group. Avingtrans
regularly reviews its employment policies. The Group is committed to a global
policy of equality, providing a working environment that maintains a culture
of respect and reflects the diversity of our employees. We are committed to
offering equal opportunities to all people regardless of their sex,
nationality, ethnicity, language, age, status, sexual orientation, religion,
or disability.
We believe that employees should be able to work safely in a healthy
workplace, without fear of any form of discrimination, bullying or harassment.
We believe that the Group should demonstrate a fair gender mix across all
levels of our business, whilst recognising that the demographics of precision
engineering and manufacturing remain predominantly male, which is, to an
extent, beyond our control.
Ethical policy
The Group complies with the Bribery Act 2010. We do not tolerate bribery,
corruption, or other unethical behaviour on the part of any of our businesses,
or business partners, in any part of the world. Employee training is refreshed
annually in all areas of the business, to ensure that the Act is complied
with.
Outlook
The Group continues to actively invest in both of its divisions, concentrating
on the global energy, infrastructure and medical markets, to optimise
shareholder value through future exits. Magnetica is finalising the
development of its compact MRI systems and Adaptix is now actively deploying
its 3D X-ray technology. Positive results are evident in various business
units, notably at Hayward Tyler and Ormandy, as highlighted by the first-half
outcomes. Our stated value creation goals are running to plan, supported by a
conservative approach to debt, especially crucial during a period of continued
economic uncertainty.
The AES division maintains a robust focus on nuclear power, thermal, and
hydrocarbon markets, along with their associated aftermarkets, as well as
critical national infrastructure in the UK. The MII division is fully focussed
on innovative compact MRI systems and 3D X-ray solutions for exciting niche
applications. Each division has a clear strategy to support end-user
aftermarket operations, servicing their equipment and relevant third-party
equipment (where appropriate) to capitalise on the ongoing demand for
efficient, reliable, and safe products and systems.
Whilst ongoing inflationary pressures continue to impact our businesses, we
actively seek to mitigate these risks, maintaining stable margins through
considerable proactive efforts by our business units.
Our markets are dynamic and we prioritise strategic M&A opportunities. We
are particularly interested in turnaround prospects and long-term
buy-and-build scenarios, recognising that businesses like ours can achieve
high valuations at the point of exit. While the Board remains vigilant, we are
confident in the current direction and potential future opportunities across
our markets. We will refine our strategy by pinpointing specific acquisitions
as opportunities arise, building businesses that generate sustainable
shareholder value, all whilst maintaining a prudent level of financial
flexibility, to mitigate unforeseen risks. With a strong first-half
performance and a pleasingly robust order book, the Group is well-positioned
to meet market expectations for the full year and the Board views the future
with confidence.
Roger McDowell Steve McQuillan Stephen King
Chairman Chief Executive Officer Chief Financial Officer
25 February 2025 25 February 2025 25 February 2025
Consolidated Income Statement (Unaudited)
for the six months ended 30 November 2024
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Revenue 79,017 65,190 136,615
Cost of sales (55,300) (44,567) (92,573)
Gross profit 23,717 20,623 44,042
Distribution costs (2,858) (2,722) (3,663)
Other administrative expenses (16,328) (14,340) (34,743)
Operating profit before amortisation of acquired intangibles, other
non-underlying items and exceptional items
5,195 4,597 8,167
Amortisation of intangibles from business combinations
(410) (410) (819)
Other non-underlying items (167) (129) (324)
Acquisition costs - (323) (347)
Restructuring costs (87) (174) (1,041)
Operating profit 4,531 3,561 5,636
Finance income (Note 5) 55 287 364
Finance costs (Note 5) (768) (483) (1,175)
Profit before taxation 3,818 3,365 4,825
Taxation (Note 3) (452) (525) (1,180)
Profit after taxation from continuing operations 3,366 2,840 3,645
Profit is attributable to:
Owners of Avingtrans PLC 3,294 2,840 3,662
Non-controlling interest 72 (207) (17)
Total 3,366 2,633 3,645
Profit per share:
From continuing operations
- Basic (Note 6) 10.2p 8.8p 11.1p
- Diluted (Note 6) 10.0p 8.6p 10.9p
Consolidated statement of comprehensive income (Unaudited)
for the six months ended 30 November 2024
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Profit for the period 3,366 2,840 3,645
Items that will not be subsequently reclassified to profit or loss
Remeasurement of net defined benefit liability - - (493)
Income tax relating to items not reclassified - - 123
Items that may/will subsequently be reclassified to profit or loss
Exchange differences on translation of foreign operations (200) (358) (667)
Total comprehensive profit for the period 3,166 2,482 2,608
Summarised consolidated balance sheet (Unaudited)
at 30 November 2024
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Non current assets
Goodwill 27,874 28,095 27,874
Other intangible assets 37,350 28,919 33,647
Property, plant and equipment 29,149 28,522 29,611
Deferred tax asset 4,009 930 3,718
Pension and other employee obligations 224 526 84
98,606 86,992 94,934
Current assets
Inventories 23,859 19,369 19,871
Trade and other receivables: falling due within one year 61,684 57,832 57,098
Trade and other receivables: falling due after one year 1,305 1,479 1,394
Current tax asset 860 1,678 927
Cash and cash equivalents 10,295 13,918 12,115
98,003 94,276 91,405
Total assets 196,609 181,268 186,339
Current liabilities
Trade and other payables (46,161) (39,651) (39,432)
Lease liabilities (2,808) (2,658) (2,855)
Borrowings (5,879) (6,199) (5,176)
Current tax liabilities (769) (1,287) (823)
Provisions (1,978) (1,212) (1,813)
Derivatives - (13) -
Total current liabilities (57,595) (51,020) (50,099)
Non-current liabilities
Borrowings (9,610) (7,262) (8,726)
Lease liabilities (6,806) (5,628) (7,200)
Deferred tax (6,488) (3,976) (6,972)
Other creditors (347) (348) (328)
Total non-current liabilities (23,251) (17,214) (23,226)
Total liabilities 80,846 (68,234) (73,325)
Net assets 115,763 113,034 113,014
Equity
Share capital 1,654 1,645 1,654
Share premium account 19,005 18,452 19,005
Capital redemption reserve 1,299 1,299 1,299
Translation reserve 760 1,152 913
Merger reserve 28,949 28,949 28,949
Other reserves 1,457 1,457 1,457
Investment in own shares (4,235) (4,235) (4,235)
Retained earnings 64,279 61,545 61,402
Total equity attributable to equity holders of the parent 113,168 110,264 110,444
Non-controlling interest 2,595 2,770 2,570
Total equity 115,763 113,034 113,014
Consolidated statement of changes in equity (Unaudited)
at 30 November 2024
Share Share Capital Merger Trans- Other Invest-ment in own shares Retained earning Total
capital premium redemp- reserve lation reserves Attributable owners of the Group
account tion reserve Non-controlling interest
reserve Total
Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 June 2023 1,612 15,979 1,299 28,949 1,170 1458 (4,235) 59,812 106,043 2,413 108,455
Ordinary shares issued 33 2,473 - - - - - - 2,506 - 2,506
Dividends paid - - - - - - - (538) (538) - (538)
Share-based payments - - - - - - - 129 129 - 129
Total transactions with owners 33 2,473 - - - - - (409) 2,097 2,097
-
Profit for the period - - - - - - - 2,633 2,633 207 2,840
Investment in subsidiary with non-controlling interest - - - - 340 - - (490) (150) 150 -
Other comprehensive income
Exchange rate gain - - - - (358) - - - (358) - (358)
Total comprehensive income for the period - - - - (18) - - 2,143 2,125 357 2,482
Balance at 1,645 18,452 1,299 28,949 1,152 1,458 (4,235) 61,545 110,264 2,770 113,034
30 Nov 2023
At 1 Dec 2023 1,645 18,452 1,299 28,949 1,152 1,458 (4,235) 61,545 110,264 2,770 113,034
Ordinary shares issued 9 553 - - - - - - 562 - 562
Dividends paid - - - - - - - (903) (903) - (903)
Share-based payments - - - - - - - 195 195 - 195
Total transactions with owners 9 553 - - - - - (708) (146) - (146)
Profit for the period - - - - - - - 1,029 1,029 (224) 805
Investment in subsidiary with non-controlling interest - - - - 70 - - (95) (25) 25 -
Other comprehensive income
Actuarial gain for the period on pension scheme - - - - - - - (493) (493) - (493)
Deferred tax on actuarial movement on pension scheme - - - - - - - 123 123 - 123
Exchange gain - - - - (309) - - - (309) - (309)
Total comprehensive income for the period - - - - (239) - - 564 325 (199) 126
Balance at 1,654 19,005 1,299 28,949 913 1,458 (4,235) 61,402 110,444 2,570 113,014
31 May 2024
At 1 June 2024 1,654 19,005 1,299 28,949 913 1,458 (4,235) 61,402 110,444 2,570 113,014
Ordinary shares issued - - - - - - - - - - -
Dividends paid - - - - - - - (584) (584) - (584)
Share-based payments - - - - - - - 167 167 - 167
Total transactions with owners - - - - - - - (417) (417) (417)
-
Profit for the period - - - - - - - 3,294 3,294 72 3,366
Other comprehensive income
Exchange rate loss - - - - (153) - - - (153) (47) (200)
Total comprehensive income for the period - - - - (153) - - 3,294 3,141 25 3,166
Balance at 1,654 19,005 1,299 28,949 760 1,458 (4,235) 64,279 113,168 2,595 115,763
30 Nov 2024
Consolidated cash flow statement (Unaudited)
for the six months ended 30 November 2024
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Operating activities
Cash flows from operating activities 6,075 (2,000) 3,604
Finance costs paid (730) (586) (1,294)
Income tax paid (274) (1,045) (952)
Contributions to defined benefit plan (140) - (24)
Net cash inflow/(outflow) from operating activities 4,931 (3,631) 1,334
Investing activities
Acquisition of subsidiary undertakings - (1,548) (1,548)
Finance income 55 287 364
Purchase of intangible assets (5,032) (2,619) (8,430)
Purchase of property, plant and equipment (1,294) (805) (3,967)
Proceeds from the sale of property, plant and equipment - - 4
Net cash used by investing activities (6,271) (4,685) (13,577)
Financing activities
Equity dividends paid (584) (538) (1,441)
Repayments of bank loans (965) (1,743) (3,213)
Repayments of leases (1,576) (1,161) (3,863)
Proceeds from issue of ordinary shares - - 563
Borrowings raised 2,780 8,039 14,734
Net cash (outflow)/inflow from financing activities (345) 4,596 6,780
Net decrease in cash and cash equivalents (1,685) (3,720) (5,463)
Cash and cash equivalents at beginning of period 11,793 17,386 17,386
Effect of foreign exchange rate changes 12 (73) (130)
Cash and cash equivalents at end of period 10,120 13,593 11,793
Cashflows from operating activities (Unaudited)
for the six months ended 30 November 2024
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Profit before income tax from continuing operations 3,820 3,363 4,825
Adjustments for:
Depreciation of property, plant and equipment 2,731 2,404 4,817
Amortisation of intangible assets 656 227 904
Amortisation of intangibles from business combinations 410 410 819
Profit on disposal of property, plant and equipment 23 7 23
Finance income (55) (287) (364)
Finance expense 768 483 1,175
Share based payment charge 167 129 324
Changes in working capital
Increase in inventories (3,966) (5,028) (4,818)
Increase in trade and other receivables (4,987) (7,536) (8,003)
Increase in trade and other payables 6,343 4,021 3,825
Increase/(decrease) in provisions 165 (190) 107
Other non-cash changes - (3) (30)
Cash inflow/(outflow) from operating activities 6,075 (2,000) 3,604
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Cash and cash equivalents
Cash 10,295 13,918 12,115
Overdrafts (175) (325) (322)
10,120 13,593 11,793
Notes to the half year statement
30 November 2024
1. Basis of preparation
The Group's interim results for the six-month period ended 30 November 2024
are prepared in accordance with the Group's accounting policies which are
based on the recognition and measurement principles of International Financial
Reporting Standards ('IFRS') as adopted by the EU and effective, or expected
to be adopted and effective, at 31 May 2025. As permitted, this interim report
has been prepared in accordance with the AIM rules and not in accordance with
IAS34 'Interim financial reporting'.
These interim results do not constitute full statutory accounts within the
meaning of section 434 of the Companies Act 2006 and are unaudited. The
unaudited interim financial statements were approved by the Board of Directors
on 25 February 2025 and will shortly be available on the Group's website at
www.avingtrans.plc.uk.
The consolidated financial statements are prepared under the historical cost
convention as modified to include the revaluation of financial instruments.
The accounting policies used in the interim financial statements are
consistent with IFRS and those which will be adopted in the preparation of the
Group's annual report and financial statements for the year ended 31 May 2025.
The statutory accounts for the year ended 31 May 2024, which were prepared
under IFRS, have been filed with the Registrar of Companies. These statutory
accounts carried an unqualified Auditor's Report and did not contain a
statement under either Section 498(2) or (3) of the Companies Act 2006.
2. Segmental analysis
Energy Medical Unallocated central items Total
AES MII
£'000 £'000 £'000 £'000
6 months to 30 November 2024
Original equipment 51,287 1,858 - 53,145
Aftermarket 25,520 352 - 25,872
Revenue 76,807 2,210 - 79,017
Operating profit/(loss) 7,787 (2,567) (689) 4,531
Net finance costs (713)
Taxation (452)
Profit after tax from continuing operations 3,366
Energy Medical Unallocated central items Total
AES MII
£'000 £'000 £'000 £'000
Year ended 31 May 2024
Original equipment 81,044 3,322 - 84,336
Aftermarket 51,893 356 - 52,249
Revenue 132,937 3,678 - 136,615
Operating profit/(loss) 10,961 (3,990) (1,335) 5,636
Net finance costs (811)
Taxation (1,180)
Profit after tax from continuing operations 3,645
Energy Medical Unallocated central items Total
AES MII
£'000 £'000 £'000 £'000
6 months to 30 November 2023
Original equipment 40,661 1,318 - 41,979
Aftermarket 23,050 161 - 23,211
Revenue 63,711 1,479 - 65,190
Operating profit/(loss) 5,529 (1,140) (828) 3,561
Net finance costs (196)
Taxation (525)
Profit after tax from continuing operations 2,840
3. Taxation
The taxation charge is based upon the expected effective rate for the year
ended 31 May 2025.
4. Adjusted Earnings before interest, tax, depreciation and amortisation
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Profit before tax from continuing operations 3,818 3,365 4,825
Share based payment expense 167 129 324
Acquisition costs - 323 347
Restructuring costs 87 174 1,041
Other exceptionals - - -
Gain on derivatives - (3) (15)
Amortisation of intangibles from business combinations 410 410 819
Adjusted profit before tax 4,482 4,398 7,341
Finance income (55) (287) (364)
Finance cost 768 483 1,175
Gain on derivatives - 3 15
Adjusted profit before interest, tax and amortisation from business
combinations ('EBITA')
5,195 4,597 8,167
Depreciation 2,731 2,406 4,817
Amortisation of other intangible assets 655 227 904
Amortisation of contract assets 89 71 137
Adjusted Earnings before interest, tax, depreciation and amortisation
('EBITDA')
8,670 7,301 14,025
5. Finance income and costs
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2024 2023 2024
£'000 £'000 £'000
Finance income
Bank balances and deposits 55 85 322
Gain on the fair value of derivative contracts - 3 15
Interest from other - 199 27
55 287 364
Finance costs
Interest on banking facilities and lease liabilities 768 483 1,175
Loss on the fair value of derivative contracts - - -
768 483 1,175
6. Earnings per share
Basic earnings per share is based on the earnings attributable to ordinary
shareholders and the weighted average number of ordinary shares in issue
during the year.
For diluted earnings per share the weighted average number of ordinary shares
is adjusted to assume conversion of all dilutive potential ordinary shares,
being the CSOP and ExSOP share options.
6 months to 6 months to Year to
30 Nov 2024 30 Nov 2023 31 May 2024
No No No
Weighted average number of shares - basic 33,089,922 32,373,636 32,733,107
Share Option adjustment 590,377 664,652 628,002
Weighted average number of shares - diluted 33,680,299 33,038,288 33,361,109
£'000 £'000 £'000
Earnings from continuing operations 3,366 2,840 3,645
Share based payments 167 129 324
Acquisition costs - 323 347
Restructuring costs 87 174 1,041
Other exceptionals - - -
Gain on derivatives - (3) (15)
Amortisation of intangibles from business combinations 410 410 819
Adjusted earnings from continuing operations 4,030 3,873 6,161
From continuing operations:
Basic earnings per share 10.2p 8.8p 11.1p
Adjusted basic earnings per share 12.2p 12.0p 18.8p
Diluted earnings per share 10.0p 8.6p 10.9p
Adjusted diluted earnings per share 12.0p 11.7p 18.5p
The Directors believe that the above adjusted earnings per share calculation
from continuing operations is the most appropriate reflection of the Group
performance.
7. Net debt and gearing
The gearing ratio at the year-end is as follows: 30 Nov 2024 30 Nov 2023 31 May 2024
£'000 £'000 £'000
Cash 10,295 13,918 12,115
Loans (15,294) (13,136) (13,580)
Lease liability - finance leases under IAS17 (3,754) (2,683) (4,293)
Lease liability - under IFRS 16 (5,860) (5,603) (5,762)
Overdrafts (195) (325) (322)
Net debt (14,808) (7,829) (11,842)
Equity 115,763 113,034 113,014
Net debt to equity ratio (12.8)% (6.9)% (10.5)%
Net debt to equity ratio excluding IFRS16 debt (7.7)% (2.0)% (5.4)%
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