Engineering firm Avingtrans PLC (LON:AVG) saw its shares jump in late-morning trading Wednesday after a boost from its recent acquisition of motor and pump maker Hayward Tyler sent its full-year earnings soaring.
The company reported that its adjusted underlying earnings (EBITDA) had shot up 690% to £5.7mln compared to last year while revenues climbed 247% to £78.9mln.
READ: Avingtrans jumps as Hayward Tyler units secure another US$3mln worth of new contracts
Gross margins also improved to 25.5% from 17.9% previously, with the firm also raising its final dividend for the year to 2.3p per share from 2.2p last year.
Avingtrans acquired Hayward in September last year as part of a ‘buy and build’ strategy in regulated niche engineering markets, as well to exploit Hayward’s facilities in the Americas, Asia, and Europe.
Looking forward, the group said it was not “unduly concerned” by the prospect of Brexit, saying it had limited direct exposure to EU markets and would likely take further action to protect its supply chains depending on any trade deal reached.
The firm had also adapted its supply chain to mitigate the impact of US tariff changes and would continue to monitor the situation.
Roger McDowell, chairman of Avingtrans, said with an eye of the eventual exit from Hayward, the firm had been restructured into separate energy and medical divisions, which would allow management to focus more clearly on growth.
He added that nuclear life extension and decommissioning markets had continued to provide “fertile ground for growth” with contract wins in the US, UK, South Korea, and mainland Europe.
However, McDowell also said the firm was mindful of “avoiding over-dependence on nuclear” and was developing new markets in renewables with funding from the US’s Department of Energy to develop solar plants.
In a note to clients, analysts at City broker finnCap reiterated their 272p target price for the group, saying the results had come in “above expectations”, with the integration of Hayward completed ahead of schedule.
“We think the results should be taken positively as it helps allay any fears about the integration process,” the broker said, adding that there was “significant inherent hidden value” that was not represented by an earnings per share (EPS) based valuation.
Shares were up 3.6% at 225p.