Avingtrans PLC Trading Update (7690X)
24 November 2014 - 6:00PM
UK Regulatory
TIDMAVG
RNS Number : 7690X
Avingtrans PLC
24 November 2014
24 November 2014
Avingtrans Plc
("Avingtrans" or the "Company" or the "Group")
Trading Update
Avingtrans plc (AIM:AVG), which designs, manufactures and
supplies critical components and associated services to the global
aerospace, energy, and medical sectors, provides the following
update on trading and guidance for the full year.
Aerospace
While the market for our aerospace products and services remains
buoyant, including increased activity with several existing and
prospective aerospace customers, significant restructuring by one
of the Company's key customers is affecting short term demand in
our Aerospace Division.
In response, the Board has decided to broaden the Group's site
rationalisation plans, which will deliver greater production
efficiency and cost improvements to Sigma Components. This
extensive programme involves the closure and merging of our Derby
site into Swadlincote (formerly RMDG) and the reorganisation of
Buckingham Composites. Farnborough will concentrate on complex
fabrications, while our Hinckley rigid pipe centre of excellence
will further rationalise machining, resulting in an increased role
for Sigma Chengdu.
Energy and Medical
At the time we announced our full year results at the start of
October, we noted the sizable task remaining to integrate Maloney
and Metalcraft. The steep decline in the oil price - and the
resulting delays in a number of project decisions - has presented
the Group with the need to implement an accelerated cost reduction
program across the Energy and Medical division.
This will involve the closure and sale of the Maloney Aldridge
site, which is already in progress. Following the resulting
transfer of the design and engineering activities to new offices,
manufacturing will be transitioned to an outsourced global supply
chain, both lowering cost and improving logistics. This will be
supported by the larger Metalcraft facility in Chatteris.
In the Medical business, the rate of production in China remains
low, but demand from Siemens has stabilised and the slow ramp-up in
their activity continues. The Group is also seeing increased
activity with other medical market prospects.
Finally, Crown International is seeing a steady recovery in its
market and has secured recent contract wins worth in excess of
GBP2m.
Outlook
The Group is a niche engineering market leader in the Aerospace,
Energy and Medical sectors. We have attractive structural growth
markets and durable customer relationships and, despite these short
term challenges, we believe that the prospects for the Group are
exciting.
However, as a consequence of these short term issues, the Board
now expects Group revenue and profitability in respect of the
current financial year to be similar to that reported for FY14,
excluding the revenue and initial losses from the RMDG acquisition.
The steps set out above will improve operational efficiency and we
expect the full year impact of these actions to be approximately
GBP0.6m, the full benefit of which will be reflected in FY16.
Notwithstanding our revised expectations, it is anticipated that
the Board will maintain a progressive dividend in respect of the
current financial year, reflecting our confidence in the overall
prospects for the Group.
Enquiries:
Avingtrans plc
Steve McQuillan, CEO
Stephen King, CFO 0115 949 9020
Numis
David Poutney (Corporate Broking)
Richard Thomas (Corporate Finance and Nominated
Adviser) 0207 260 1000
Newgate Threadneedle
(Financial PR)
Adam Lloyd / Heather Armstrong 020 7653 9850
About Avingtrans
Avingtrans plc is engaged in the provision of highly engineered
components, modules and services to the Aerospace, Energy
and Medical markets worldwide.
The business is made up of 2 divisions:
-- Aerospace, engaged in the manufacture of rigid pipe assemblies,
fabrications and prismatic components - both metallic and
composite - for the global aerospace market and precision
polishing of aircraft components and;
-- Energy and medical, engaged in the design and manufacture
of machined and fabricated pressure and vacuum vessels and
process plant and equipment for the power, oil & gas and
medical markets. Plus, design and manufacture of fabricated
poles and cabinets for roadside safety cameras and rail
track signalling.
This information is provided by RNS
The company news service from the London Stock Exchange
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