Aerospace woes dent Avingtrans H1 results

AEROSPACE, energy and medical sector components supplier Avingtrans has suffered a 14% hit to its first half revenues after the business was impacted due to upheaval in the aerospace sector.

The Nuneaton company said forecast reductions by some of its main customers had impacted the performance of its aerospace operation.

It does not mention the customers by name but one of the OEMs it supplies is Rolls-Royce, which has been struggling to fill an order black hole and has had to radically streamline its own operations.

Similarly, Avingtrans has also restructured its operations to try and minimise the impact of the revenue reduction.

In its first half results statement, the company said it had integrated its acquisition from Tricorn – RMDG – and had moved its Derby site into this business, to give it the scale required for a sustainable future.
 
“The jolt of the customer forecast reductions in the first half impelled us to accelerate our restructuring plans at other sites too and this programme will be completed in the current financial year,” it said.

“Although the volume reduction has impacted profit in the period, underlying margins remain sound, albeit tempered by the on-going investment in new composites technology and the fact that RMDG was a loss making business in the first half. Customer quality and delivery profiles continue to improve and our main trading partners appreciate our consistency.”

It said its Aerospace strategy was working and the drive to diversify its customer base was evident in a contract win from PFW Airbus.

Elsewhere, it said the transformation of its Energy and Medical operation had been severely challenged by the reduction in the price of oil. However, this had accelerated its plans and had pushed it further into new sectors other than oil & gas.

“Whilst the short-term results are below our original expectations, our strategic plans for the group remain intact. Sigma Components and Metalcraft are leading players in their niche markets and both businesses are becoming world class supply chain partners,” it said.

“Despite recent market issues, our strategy should lead to growing investor returns, as stability is restored. With robust, long-term blue-chip customer relationships, we remain confident about the future of Avingtrans and achieving the board’s full year expectations.”

Revenue declined by 14% overall, to £27.5m (H1 2014: £32.2m). Profit figures were down in H1, though it said the restructuring activities and recovering sales were expected to improve during the second half.