19 May 2016 07:00
19 May 2016
Exova Group plc
Trading Update
Strong overall growth
Exova Group plc ("Exova"), a leading international provider of technically demanding testing, certification and advisory services, today releases a Trading Update for the period since 31 December 2015 to date. Where stated, financial results are for the period from 1 January to 30 April 2016 compared with the corresponding period in 2015.
Group performance for the four months to 30 April 2016
· Revenue up 12.7% at constant currency; 15.4% at actual rates
o 1.7% organic growth at constant currency (7.7% excluding Oil & Gas and Industrials)
o 11.0% growth from M&A activity
· All acquisitions performing well
· M&A pipeline continues to be strong
· Sale of Food, Water and Pharmaceutical business in the UK and Ireland announced today
Regional performance in the period from 1 January 2016 to date
In Europe, we saw good organic growth in Aerospace and very strong growth in our Product & Certification cluster. As expected, we have seen a further contraction in our Oil & Gas and Industrials cluster and some reduction in Health Sciences.
In the Americas, we saw solid organic growth in Aerospace, good growth in Health Sciences and a particularly high level of activity in Transportation which we expect to return to more normal levels. Our Oil & Gas and Industrials cluster has experienced similar headwinds to Europe.
In Rest of World, very strong organic growth has continued in the Middle East with the ramp-up of infrastructure projects. This was partially offset by the anticipated contraction in Oil & Gas and Industrials.
We have continued to take action to mitigate the impact on margin in Oil & Gas and Industrials.
Acquisitions and disposal
On 15 February 2016, the Group acquired a majority stake in Admaterials Technologies Pte Ltd, a Singapore based company that provides testing services in the construction sector, as well as chemical, environmental and mechanical testing and certification services. This company has annual revenues in the region of £3.5m and a team of more than 70 specialists and further enhances our position in Asia. This business and our other acquisitions continue to enhance the overall quality of our Group and are performing well.
In addition, we announced today the agreement to sell our Food, Water and Pharmaceutical business in the UK and Ireland. This sale allows us to dedicate significantly more financial and management resource to growing in sectors where we can build on our market leading positions in technically demanding services such as Fire, Transportation, Aerospace, Industrials and Infrastructure related testing.
Outlook
For the full year, the Board continues to expect modest organic growth at constant currency and earnings in line with previous guidance, adjusted for the disposal announced today. Given the strong pipeline, we expect our M&A programme to contribute significantly to overall growth.
Ian El-Mokadem, Chief Executive Officer, commented:
"I am pleased with our performance in the first four months of 2016. Organic growth is in line with our expectations, demonstrating the strength of our portfolio and business model, and we continue to make very good progress with acquisitions. The announcement of the sale of our UK and Ireland Food, Water and Pharmaceutical business enables us to focus our resources where we see the best growth opportunities for the Group."
AGM & Half year results
The Annual General Meeting of Exova Group plc is being held today, 19 May 2016, at 11.00 a.m. at The Cavendish Hotel, 81 Jermyn Street, London SW1Y 6JF.
The Group's half year results to 30 June 2016 will be announced on 31 August 2016.
Notes
The Food, Water and Pharmaceutical business in the UK and Ireland had revenues of around £20m in 2015 and is included in our Europe region and Health Sciences cluster. It is anticipated that the disposal will complete early in the third quarter of 2016 for consideration of approximately £18m.
Contacts
Ian Middleton / Sophie Moate
Powerscourt Group
Tel. Direct +44 (0)20 7250 1446 / +44 (0)7885 508 527
exova@powerscourt-group.com
Ian Power, Investor Relations
Exova Group plc
Telephone: +44 (0) 131 476 7619
investor.relations@exova.com
About Exova
Exova is one of the world's leading laboratory-based testing groups, trusted by organisations to test and advise on the safety, quality and performance of their products and operations. Headquartered in Edinburgh, UK Exova operates 145 laboratories and offices in 32 countries and employs around 4,500 people throughout Europe, the Americas, the Middle East and Asia/Asia Pacific.
Exova's capabilities help to extend asset life, bring predictability to applications, and shorten the time to market for customers' products, processes and materials. With over 90 years' experience, Exova specialises in testing across a number of key sectors from health sciences to aerospace, transportation, oil and gas, fire and construction.
This Trading Update release contains forward-looking statements that involve substantial risks and uncertainties and actual results and developments may differ materially from those expressed or implied by these statements by a variety of factors. These forward-looking statements speak only as at the date of this press release. In addition, all projections, valuations and statistical analyses provided in this document may be based on unaudited pro-forma financial information, subjective assessments and assumptions. They may use alternative methodologies that produce different results and should not be relied upon as an accurate prediction of future performance.