Avingtrans (AVG said it ended FY21 with “record adjusted profits and a solid cash position” after the group saw revenue from continuing operations rise by 7.1% to £98.5m up from £92m in FY20. The set of results have prompted the Board to reintroduce a full year dividend of 4p a share.
Today, in its preliminary results for the year ended 31 May 2021, Avingtrans, which designs, manufactures and supplies critical components to the energy, medical and industrial sectors, reported record profits following the disposal of Peter Brotherhood in March 2021 for £35m.
As a result of the positive set of results, the Board of Avingtrans has reinstated the full year dividend to propose a dividend of 4.0p per share. Looking ahead, the Company informed investors that it also intends to reinstate progressive interim and final dividends for FY22.
During the period, Avingtrans reported record adjusted EBITDA from continuing operations which increased by 78.5% to £12.5m, up from £7.0m in FY20. Profit before tax increased to £7.7m (FY20: £2.6m) while diluted earnings per share were boosted to 22.4p (FY20: (8.0p).
Commenting on the results, Roger McDowell, Chairman of the Group, hailed the Company’s Pinpoint-Invest-Exit Strategy (“PIE”) which he stated had proven its worth with the successful sale of Peter Brotherhood which enabled the delivery of “excellent returns” for shareholders.
McDowell also highlighted the success of this PIE strategy in the recovery progress at Booth and Energy Steel and in the acquisition of a majority stake in Magnetica (MNA) in Australia.
In reference to the acquisition of the assets of Booth Industries in Bolton, UK and Energy Steel in Michigan, US back in June 2019, Avingtrans said both of these opportunities have made good progress, with Booth, in particular, now contributing strongly to Group results.
In particular, McDowell outlined that the Company’s Medical and Industrial Imaging (MII) division has since ‘metamorphosed’ into a niche MRI player, following the acquisition of its majority stake in Magnetica as well as its merger with Scientific Magnetics and Tecmag.
Over the year, the Company’s gross margin improved to 30.4% (2020: 26.8%) due to the improving gross margin mix from the former HTG business units and the recovery at Booth, as the Company’s transformation programme “continues to bear fruit” Avingtrans noted.
Commenting, McDowell said: “The Group forged ahead despite continuing adverse impact from Covid-19 and we ended the year with record adjusted profits and a solid cash position.”
He added, “Once again, our Pinpoint-Invest-Exit Strategy (“PIE”) has proved its worth with the successful sale of Peter Brotherhood delivering excellent returns for our shareholders.”
Avingtrans said it continues to invest in its three divisions, with a focus on the global energy and medical markets, to position them for maximum shareholder value via eventual exits.
Whilst the on-going disruption caused by the Covid-19 pandemic remains the Company’s biggest uncertainty, the Group told investors that it has taken ‘rapid and effective cost and risk mitigation actions’ to limit any potential downside and that it will continue to be ‘on its guard.’
As well as the final dividend proposed, the Group intends to return to its commitment to long term shareholder returns in FY22, with both interim and final dividend payments in prospect.
‘Our resilient view of the overall prospects for the Group, underpinned by our prudent approach to debt and financial headroom, support this decision,’ the company concluded.
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