H1 profits rise for Avingtrans despite revenue dip
MIDLANDS manufacturing group Avingtrans has announced a 38% increase in half year profits, despite a fall in revenue.
The Nuneaton-based group, which designs, manufactures and supplies critical components, modules and associated services to the aerospace, energy and medical sectors, said revenue for the six months ended November 30, 2015 fell by 5% to £26.3m (H1 2015: £27.5m).
However, it said the residual impact of a year on year reduction caused by a decline in oil prices had now been fully absorbed.
Adjusted pre-tax profit for the period rose 38% to £1.2m, (H1 2015: £0.8m). Adjusted diluted earnings per share was 3.4p per share (H1 2015: 2.9 pence per share).
Net debt marginally increased to £6.1m (May 31, 2015: £5.9m), while the company has stated its intention to pay a 10% increase in interim dividend – from 1p last year to 1.1p this first half.
The group said it had seen a “pleasing recovery” of long term earnings growth in its crucial Aerospace sector to 11% (7% in H1 2015).
Its site rationalisation programme continued during the period with its Swadlincote operation merged into its biggest site at Hinckley. The Farnborough and Sandiacre sites were also continuing to progress positively, it added.
Its Chinese pipe production operation was said to be expanding to plan, with further investment expected in 2017.
Its toughest sector is Energy and Medical, where revenues were down 19% over the period, although margins remained stable. Revenues for this will be weighted towards the second half.
Overall, the group said it was on-track for a full year profit this year; which if successful would reverse a small loss made last year.
Commenting on the results, Roger McDowell, Avingtrans chairman, said: “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.
“Consequently, our first half performance improved and there are further improvements to come.
“Post period end, we have agreed to buy Rolls-Royce’s pipe production assets for £3.5m. This strategic acquisition will cement Sigma’s market lead in aerospace pipes and gives us greater visibility over future activity levels.”
