Ben Stocks - Chief Executive Chris Tyler - Finance Director
Summary Consistent strategy Consistent strategy delivering results Niche positions New product development in growing, regulated markets and intellectual property 2013-2018 9% 13% £68m £42m CAGR cash from invested CAGR operations in revenue in EPS Year ended 30 November 2018 11% 11% EPS £13.5m 43% return on revenue growth to invested operating capital growth 22.9p employed
Specialist filters are used to protect costly or complex downstream systems Attractive business characteristics Niche Robust demand Barriers to positions: drivers: entry: Long life cycles Secular trends Specialist design skills Bespoke Regulation/legislation Engineering skills Consumable products Maintenance Patent protection Specialist filtration schedules Quality accreditation and environmental technology
Consistent strategic A focus on regulated markets and operational objectives 1 with long-term growth prospects Four key markets Long-term growth from developing specialist filtration and environmental technology businesses Concerted new product 2 both organically and development by acquisition Geographic expansion 3 to support key markets Into 2019: capacity in Generate cash to invest in: Organic growth place for 4 Acquisitions further growth Dividends
A focus on regulated markets with long-term growth prospects 1 Markets Regulation Market growth Growth in pax revenue 4.7% FAA, CAA, EASA 2 Aerospace miles 2018 - 2037 and other specific accreditations p.a. (Source: Boeing 2018) Long term growth in 3-4% International nuclear standards: nuclear power Industrial NQA1, ASME, etc generation capacity p.a. 3 (Source: IAEA) 5-6% Growth in water Approved methods: Laboratory analysis consumables EPA, SEPA, EU water directives p.a. (Source: company estimate) 4 Growth in primary ISO and customer 3.6% Metal Melt Quality aluminium usage to accreditations; extensive p.a. qualification requirements 2021 (Source: CRU 2018)
Main operating Approximate share companies of Group sales Business division Principal markets 1 Aerospace Aerospace Porvair Filtration 40% General industrial & Industrial Group Energy 2 Seal Analytical Environmental (Rohasys) 30% Laboratory Bioscience Porvair Sciences Chromatography (JG Finneran) 3 Global aluminium Metal Melt 30% SELEE Corp US foundry Quality Super alloys 4 Main markets and operating companies – new divisions
Strong market positions and new product development 1 Aerospace 2 Niche positions Growth drivers Recent new Competitive products advantage Inerting, hydraulics, lube Installed base Fuel systems New build oil, anti-icing Coolant systems Maintenance Design engineering 3 Boeing 787-10 777 Hydraulics New airframes and Range of media engines TX P8 Design protection Retrofit programmes Airbus NEO Rolls Royce Ultrafan 4
Strong market positions and new product development 1 Industrial 2 Niche positions Growth drivers Recent new Competitive products advantage Gasification spares Installed base Hot gas and gasification Gasification build rates 2 nd generation Pulse jet systems Maintenance schedules Range of media 3 Nuclear: Rolls Royce Nuclear remediation Nuclear clean-up Design engineering Rotary kiln filters Polymer production Energy efficiency and Design protection security Microelectronics 4
Strong market positions and new product development 1 Laboratory 2 Niche positions Growth drivers Recent new Competitive products advantage Seal: AA500 Installed base Analysis of inorganic Regulated water testing chemicals in water Analytical science: Minilab sampler Instrument design 3 Sample preparation protection • Detection limits Sample prep ranges Chromatography Porous plastics IP and • Falling costs per test New Vyon consumables related patents • Automation 4
Strong market positions and new product development 1 Metal Melt Quality 2 Niche positions Growth drivers Recent new Competitive products advantage Selee CSX™ / CSW™ Patent protection Aluminium cast house Aluminium consumption filtration Selee IC™ US auto and light truck Metallurgical expertise 3 Gray and ductile iron production Selee SA™ US / China filtration Increased use of high manufacturing Range extensions Super alloys grade and exotic alloys Expansion in China 4
Geographic expansion in key markets: £42 million invested in the last five years 1 Americas UK and Europe Asia 7 sites 5 sites 2 sites 2018 update: 2018 update: 2018 update: 2 Keystone Filter acquired Rohasys acquired Further investment in Xiaogan J G Finneran plant expansion Bioscience media expansion Microelectronics plant upgrade Improvements to ceramic 3D capability 3 Revenue Revenue Revenue 13% 15% 52% 19% UK Europe 4
Record performance for the year ended 30 November 2018 1 Revenue Revenue Revenue Revenue 11 % 17 % 9 % 5 % 2 to £128.8m Aerospace & Industrial Laboratory Metal Melt Quality 3 Adjusted PBT Basic EPS Adjusted basic EPS 9 % 13 % 11 % to £13.5m to 22.1p to 22.9p 4
Adjusted income statement for the year ended 30 November 2018 1 2018 2017 £000 £000 Revenue 128,823 116,423 2 Operating profit 14,343 13,021 Interest (830) (657) Profit before tax 13,513 12,364 3 Tax (3,113) (3,011) Profit for the year 10,400 9,353 Adjusted EPS (basic) 22.9p 20.7p 4
Adjustments to the profit for the year for the year ended 30 November 2018 1 2017 2018 2017 2018 £000 £000 £000 £000 Adjusted profit for the year 10,400 9,353 Equalisation of GMP (773) - 2 Amortisation of acquired intangibles (564) (244) Other acquisition related expenses (138) (438) Adjustments to profit before tax (1,475) (682) 3 Tax effect of pre-tax adjustments 325 171 Tax exceptional item 778 - Adjustments to tax 1,103 171 4 Profit for the year 10,028 8,842
Cash flow for the year ended 30 November 2018 1 2018 2017 £000 £000 Operating cash flow before working capital movements 16,989 13,651 Working capital movement (1,654) (1,394) 2 Interest (339) (216) Tax (2,419) (2,741) Capital expenditure (net of disposals) (4,452) (5,425) Net cash from operations 8,125 3,875 3 Acquisitions (9,007) (5,932) Proceeds from issue of shares 131 364 Purchase of Employee Benefit Trust shares (416) (475) Dividends paid (1,957) (1,769) 4 Exchange movements (37) 90 Net cash at 1 December 9,786 13,633 Net cash at 30 November 6,625 9,786
Aerospace & Industrial Results and progress – year ended 30 November 2018 1 2018 2017 £000 £000 Revenue 50.5 43.2 2 Operating profit 8.0 6.8 17% revenue growth Outlook US nuclear and industrial orders Microelectronics plant upgrade 3 Keystone filter acquired and integrated Stronger aerospace order book Second half aerospace strength Large projects commissioning Gasification servicing and spares 4
Laboratory Results and progress – year ended 30 November 2018 1 2018 2017 £000 £000 Revenue 38.7 35.3 2 Operating profit 6.5 6.3 9% revenue growth Outlook Seal Analytical strong in US, offsetting China falls Seal instrument upgrades 3 Strong performance from JG Finneran Bioscience capacity and capability increased Rohasys acquired and trading in line with targets JG Finneran plant expansion Finneran and Rohasys synergies 4
Metal Melt Quality Results and progress – year ended 30 November 2018 1 2018 2017 £000 £000 Revenue 39.6 37.8 2 Operating profit 2.4 1.7 Outlook Constant currency revenue up 9% 3 China losses diminish as volumes/margins Growth from cast shop and super alloys increase Improved plant efficiencies Range and volume growth in ceramic 3D printing Record US margins China revenue up over 30% 4
Investment and development opportunities: 2019 – 2022 £42m invested in capex and acquisitions over five years; £13.5m in the year Metal Melt Aerospace Industrial Laboratory Quality Boeing 737 Auto Pilot Nuclear: HEPA AA500 Growth in China based on value selling Boeing 737 Max Gasification spares and New Vyon service Rolls Royce BR715 Molecular coatings China input cost reduction Organic USA: 20% CAGR (2013-18) Comac C919 JGF plant expansion: clean growth Ceramic 3D manufacture – GasPro microelectronics manufacture Inerting: 3 rd Generation aerospace and IGT Keystone Filter integration Rohasys: NPD process Acquired growth
Summary and outlook Results Investment Outlook Order books Revenue Invested in the HEALTHY 11% £13.5m for 2019 growth period STRONG Balance sheet PBT growth Rohasys 9% ACQUIRED to £13.5m Keystone Filter Clear organic ORGANIC growth targets JG Finneran EPS growth CAPACITY 11% Microelectronics POSITIVE Outlook to 22.9p EXPANSION Bioscience
Ben Stocks - Chief Executive Chris Tyler - Finance Director
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