>
Engineering firm Avingtrans reveals interim revenues rose to £50m despite supply chain issues
- All three divisions of the group achieved growth thanks to higher OEM sales
- Despite lower profits, Avingtrans announced a higher dividend of 1.7 pence per share
Engineering firm Avingtrans has reported a half-year turnover of £50 million, despite supply chain disruptions, compared to £44.5 million for the same period a year earlier.
Turnover increased by £5.5m for the six months ending November 2022 as all three of the group’s core divisions delivered growth driven by higher original equipment manufacturing sales, particularly in the engineered pumps and motors division.
Gross margins were impacted by the increased mix of OEM sales, resulting in a profit drop from £350,000 to £2.5m, but the AIM-listed company announced a slightly higher dividend of 1.7p per share.
Manufacturing: Avingtrans, based in Cambridgeshire, designs products such as compressors, cross-pass doors (pictured) and packaged water heaters
The company’s order book also continued to strengthen, reaching more than 90 percent coverage for the fiscal year ending May 2023 and 55 percent for the following 12 months.
Among the deals won during the reported period was a $1.1 million contract extension by Hayward Tyler, a subsidiary of Avingtrans, to develop molten salt pumps for the U.S. Department of Energy’s Advanced Reactor Demonstration Program.
This followed a multimillion-dollar contract in March with a separate subsidiary of Avingtrans, Energy Steel, to support the ITER project in France, which aims to produce energy from nuclear fusion.
Still, the group admitted that this division was one of many that has faced supply chain problems, mainly caused by the Russian invasion of Ukraine and the easing of Covid-19 restrictions.
Avingtrans noted that logistical issues remained the “biggest uncertainty,” though it thinks the “peak disruption” may be over.
Chairman Roger McDowell said, “While the board remains vigilant in the current environment, we are confident in the current direction and potential future opportunities in our markets.
“Strong order intake and timing of contract revenue recognition have provided management with good insight into H2 2023 revenue and profit, despite ongoing supply chain disruptions.”
Based in Cambridgeshire, Avingtrans designs products such as compressors, cross-pass doors, packaged water heaters and helium-containing pressure vessels.
Its main focus is on the nuclear industry, where it is seeing orders grow amid a renewed focus on energy security, particularly in the United States, home to the world’s largest civilian nuclear fleet.
In the UK, the company’s Metalcraft division currently has a ten-year contract to manufacture stainless steel waste storage boxes for the decommissioned Sellafield power station in Cumbria.
Avingtrans also has a foothold in the UK oil and gas sector, where it is gaining more work as fossil fuel prices remain high due to the easing of pandemic restrictions and the war in Ukraine.
Avingtrans shares Closed 2.65 percent lower at 377.2 pence on Wednesday, but their value has still grown by about 73 percent over the past five years.