PINPOINT-INVEST-EXIT

2022 Annual Report

About

Avingtrans plc has a proven strategy of "buy and build" in highly regulated engineering markets, a strategy it has named "Pinpoint-Invest-Exit". Significant shareholder value is delivered through a clear strategy, a strong balance sheet and an agile and experienced management team.

www.avingtrans.plc.uk

About us

Delivering shareholder value through a proven strategy of Pinpoint-Invest-Exit in highly regulated global engineering markets

The Group has a proven track record in delivering shareholder value through PIE:

  • Identifying and executing prudent deals with precision and speed
  • Building strong brands and value from constituent parts
  • Crystallising these gains with periodic sales of businesses at advantageous valuations
  • Returning the proceeds to shareholders

2012

17

Sold JenaTec; Purchased Aerotech & PFW

2013

32

Purchased Maloney

2014

45

Purchased RMDG

2015

31

Purchased Rolls Royce pipes; Sold Sigma

2016

Returned £19.4m to shareholders;

2017

Purchased Scimag

Purchased HTG & Ormandy

2018

Purchased Tecmag

2019

Purchased Booth and Energy Steel

2020

Purchased Magnetica, sold Peter Brotherhood

2021

Purchased Transkem, invested in Adaptix

2022

50

4319

67

71

77

137

138

0

30

60

90

120

150

Market Cap £m

Tender Offer £m

Timeline

2012 (98p)

2016 (180p)

2017 (235p)

2019 (217p)

2021 (335p)

Precision instruments

The Aerospace Division,

Acquisition of the Hayward

Acquisition of Booth

Peter Brotherhood sold for an

business, JenaTec,

Sigma Components,

Tyler Group for £29.4m and

Industries for cash

enterprise value of £35.0m,

sold for £13.5m

sold for £65m

creation of Energy and

consideration of £1.8m

and acquisition of Magnetica

Medical Divisions

Energy Division

Performance critical solutions for energy systems

Engineered Pumps and Motors (EPM) Division

The EPM division is built on one brand, Hayward Tyler. Established in 1815, Hayward Tyler designs, manufactures and services performance-critical electric motors and pumps to meet the most demanding of applications for the global energy industry, as both an OEM supplier and a trusted through life support partner.

Process Solutions and Rotating Equipment (PSRE) Division

The PSRE division comprises a number of established brands with expertise across the global energy market. The brands specialise in the design, manufacture, integration and servicing of an extensive product and service offering including bespoke high-integrity doors, containers and skidded systems.

Medical Division

Innovative solutions for medical systems and research

Medical (MII)

The medical division has special expertise in the design and manufacture of innovative equipment for the medical, science and research communities. Including cutting-edge products for medical diagnostic equipment; high performance pressure, vacuum vessels and composite materials for research organisations; superconducting magnets and helium-free cryogenic systems.

Commenting" on the results, Roger McDowell, Chairman, said:

"Once again, the pugnacity of the Group was tested and I'm pleased to report that we stoically fought our way through, despite multiple counterpunches and headwinds. With a strong balance sheet, we moved to invest in capex and new technologies in our existing businesses; bought bolt-on business, Transkem, for Fluid Handling; invested in 3D X-ray pioneer Adaptix; as well as continuing to invest in Magnetica - all with an eye on amplifying our impact in potentially disruptive nuclear and medical imaging markets. The commotions may continue, but we remain agile and steady on our feet - a great tribute to our management teams and

all of our employees."

Financial highlights

  • Revenue from continuing operations increased by 1.9% to £100.4m (2021: £98.5m)
  • Gross Margin improved by 360 basis points to 34.0%
    (2021: 30.4%)
  • Adjusted1 EBITDA from continuing operations increased slightly to £12.7m (2021: £12.5m)
  • Adjusted1 PBT from continuing operations increased to £8.2m (2021: £7.7m)
  • Adjusted1 Diluted earnings per share from continuing operations reduced slightly to 21.8p (2021: 22.4p) due to increased tax charge
  • Net Cash (excluding IFRS 16) of £16.7m (31 May 2021: £23.3m) following investment in business
  • Final Dividend 2.6p per share (2021: 4.0p) resulting in a total
    dividend for the year of 4.2p (2021: 4.0p)

Operational highlights - Energy

  • Revenue increased 5.7% to £97.9m (2021: £92.7m)
  • Metalcraft contract progressed to next phase to supply the Sellafield 3M3 boxes - contract value up by £20m to £70m
  • Booth continues to recover strongly and has completed its factory extension for the HS2 contract
  • Hayward Tyler and Energy Steel win multiple nuclear bids, including next generation enabling contracts
  • Apprentice training school at Chatteris completed and handed over to operator, West Suffolk College
  • Energy Steel restructured and moved to new, smaller facility in Michigan
  • Acquired Transkem for £0.6m (net of cash) plus deferred consideration £0.4m. Concluded the successful integration into Fluid Handling in East Kilbride

Operational highlights - Medical

  • Revenue decreased to £2.5m (2021: £5.8m) following pivot away from 3rd party component manufacture
  • Compact helium-free MRI system making good progress
    - expected to launch in Q4 calendar 2023
  • Complementary £4.0m (11.9%) stake purchased in emerging
    3D X-ray leader, Adaptix, in Oxford, UK
  • Adaptix has launched its veterinary product and submitted its
    510(K) to the FDA in USA for orthopaedics
  • Potentially significant market opportunities in the target imaging markets for both businesses
  • Adjusted to add back amortisation of intangibles from business combinations, acquisition costs and exceptional items

Company Information

For the year ended 31 May 2022

Company registration number:

01968354

Registered office:

Chatteris Business Park

Chatteris

Cambridgeshire

PE16 6SA

Directors:

R S McDowell (Non-executive Chairman)

S McQuillan (Chief Executive Officer)

S M King (Chief Financial Officer)

L J Thomas (Non-executive Director)

J S Clarke (Non-executive Director)

J S Reedman (Non-executive Director) appointed 1 March 2022

Website:

www.avingtrans.plc.uk

Secretary:

S M King

Bankers:

HSBC Bank plc

Royal Bank of Scotland

PO Box 68

2 St Philips Place

130 New Street

Birmingham

Birmingham

B3 2RB

B2 4JU

Registrars:

Link Group

10th Floor

Central Square

29 Wellington Street

Leeds

LS1 4DL

Nominated advisor and broker:

Singer Capital Markets Advisory LLP

1 Bartholomew Lane

London

EC2N 2AX

Solicitors:

Shakespeare Martineau LLP

No1 Colmore Square

Birmingham

B4 6AA

Independent Auditor:

Cooper Parry Group Limited

Chartered Accountant & Statutory Auditor

Sky View

Argosy Road

East Midlands Airport

Castle Donington

Derby

DE74 2SA

1

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Disclaimer

Avingtrans plc published this content on 10 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 October 2022 14:22:01 UTC.