AVG Avingtrans Plc

19 June 2024

Avingtrans Plc

("Avingtrans", the "Company", or the "Group")

Trading Update and Notice of Results

Avingtrans PLC (AIM: AVG), which designs, manufactures and supplies critical components, modules, systems and associated services to the energy, medical and industrial sectors, announces a positive trading update in respect of the financial year ended 31 May 2024.

The Board is pleased to report revenue from continuing operations has reached a record level and aligned with market expectations. Adjusted EBITDA from continuing operations is materially ahead of market expectations* and is expected to be in the range of £13-14m. This was in part due to lower than budgeted commercialisation costs in the Medical Division, some of which have been delayed in to FY25. Net debt at £6.1m, excluding IFRS16, was better than anticipated*, with the completion of several key projects contributing to enhanced cash receipts and lower-than-expected spending on medical developments.

Advanced Engineering Systems Division (AES)

The AES division delivered strong underlying results and maintained its momentum into the new financial year, reflecting its robust performance and growth potential. Ormandy achieved its best results since its acquisition, showcasing the successful integration and operational improvements within the division. Similarly, Slack & Parr completed a successful integration following the acquisition of its assets in August, marking a significant milestone. In its first year with the Group, Slack & Parr recorded a positive EBIT, demonstrating its helpful contribution to the overall performance. Hayward Tyler also achieved its best results since acquisition, further underscoring the group's effective acquisition strategy and operational quality across its divisions.

Medical & Industrial Imaging Division (MII)

The medical businesses showed significant progress during the period, with advancements in both novel 3D X-ray products and helium-free MRI systems. Both products received encouraging market feedback at recent trade shows, indicating strong market interest and potential. Adaptix, following its acquisition in September, has been successfully integrated and is now equipping its Scottish facility to manufacture key system components for veterinary and orthopaedic products. The Group has initiated sales of veterinary and non-destructive evaluation (NDE) products in the UK and USA, though the sales buildup has been slower than initially forecasted. However, a volume increase is anticipated in the current financial year.

Magnetica has transitioned into larger premises in Brisbane and Houston, investing in these facilities to enable volume production of MRI systems starting in FY25. While Magnetica has made substantial progress in finalising the system's development, the increased cyber security scrutiny required by the FDA in the USA has required additional time and effort. Consequently, it is now expected to obtain 510(k) approval in the first half of 2025. Thereafter, Magnetica will be ready to immediately commence sales in the USA. Both Magnetica and Adaptix have appointed initial distributor partners in the UK and the USA, further strengthening their market presence and distribution capabilities.

Notice of Results

Avingtrans expects to publish its audited results for the year ended 31 May 2024 on 25 September 2024, at which time it will provide a further performance update.

Steve McQuillan, CEO of Avingtrans, commented:

"We are very pleased with the Group's performance reporting record revenue with Adjusted EBITDA ahead of market expectations. Lower commercialisation costs in the Medical Division, some of which have been delayed in to FY25, have contributed to this performance but we are pleased that the Group is entering FY25 with record-level revenue from continuing operations, leading the Board to view the outlook for this year with confidence."

*Prior to today's announcement, the Company understands that market expectations were: Adjusted EBITDA of £10.0m and Net Debt (exc. IFRS 16) of £7.1m

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About Avingtrans plc:

Avingtrans designs, manufactures and supplies original equipment, systems and associated aftermarket services to the energy, medical and industrial markets worldwide. 

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