Shares in Avingtrans PLC (LON:AVG) were on the rise in early deals on Wednesday after the firm swung to a pre-tax profit in the first six months of its fiscal year.
The engineering group reported an adjusted pre-tax profit for the period ended 30 November of £1.6mln, swinging from a £100,000 loss a year ago, while revenues from continuing operations surged 77% to £47.7mln. Gross margins had also improved to 25.7% from 22.6%.
READ: Avingtrans shares jump as earnings rocket on back of Hayward Tyler acquisition
The rise in earnings was led by growth in the company’s Engineered Pumps & Motors (EPM) and Process Solutions & Rotating Equipment (PSRE) divisions, which reported sales increases of 88% to £22.8mln and 95% to £18.7mln respectively.
In response to the improved performance, Avingtrans also hiked its interim dividend by 7.7% to 1.4p per share.
Looking ahead, the company said it did not expect “any material impact” to its operations from Brexit due to its “relatively limited” European exposure, adding that it was “well placed” to benefit from macro-trends in its markets, particularly in the energy sector.
In a note to clients, analysts at broker finnCap said the results had shown a “good profit improvement” and confirmed that trading was on track with full-year forecasts.
As a result, analysts reaffirmed their 272p price target on the stock, which they said pointed to “strong upside to current levels” as profits were expected to recover over the next year from “restructuring gains”.
Shares were up 1.7% at 213.5p.