Avingtrans Share Discussion Threads

[meijiman] 30/10/2019 12:42

Yes and what a shocking indictment of the previous owners management..complete deadlegs.

[steve3sandal] 30/10/2019 08:44

Well done Booth Industries. Looks like this might have been picked up on a PE of about 1x. Well done Avingtrans.

[fillipe] 15/10/2019 12:00

277.245p paid for AVG this morning.

Best bid/ask on show is now 270p- 280p, so a nice riser in recent times.

Moving steadily towards finnCap's 26th June tp of 300p.

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[strollingmolby] 07/10/2019 17:17

And that would appear to be an all time high! Well done Avingtrans, onwards and upwards.

[cerrito] 22/9/2019 21:56

Thanks for posting that useful summary Jeff H
Roger Rail
Thanks for that and have provoked me to see that while Medical made an operating profit year ending 5/17 they have had operating losses in the last two years-albeit small.

[rogerrail] 22/9/2019 21:25

Despite good results in energy, I am not sure the management know what they are doing with medical division. It has been struggling ever since I can remember, at least for the past 6 years or so.

[jeff h] 22/9/2019 14:15

Simon Thompson of the IC view for you Cerrito:-


Avingtrans (AVG:245p), a designer, manufacturer and supplier of original equipment, systems and aftermarket services to the energy and medical sectors, announced a major earnings beat for the 2018-19 financial year ahead of the results when I raised my target price from 275p to 300p (‘Avingtrans posts major earnings beat’, 26 June 2019). Shareholders have been rewarded with a higher dividend (3.8p a share) for the eighth consecutive year.

In the event, the results were even better than house broker finnCap’s upgraded expectations. Avingtrans reported a 34 per cent rise in revenue to a record high of £105m, partly driven by acquisitions but also driven by 11 per cent organic growth. It’s a more profitable income stream, too, as operational improvements made meant that underlying pre-tax profit surged by 124 per cent to £5.3m, and adjusted earnings per share (EPS) increased by 76 per cent to 14.9p on a lower than expected tax charge. That was well ahead of finnCap’s 12.7p upgraded EPS forecasts in June. There is scope for outperformance in the new financial year, too.

Factoring in a combination of ongoing strong organic growth and the benefits of some small acquisitions, finnCap’s forecasts annual revenue of £125m (over 80 per cent is already covered by the order book) and a 17 per cent rise in pre-tax profit to £6.2m. On this basis, expect a near 11 per cent hike in EPS of 16.5p. However, Avingtrans has £35.4m of tax losses available from acquisitions made, and UK corporation tax rate will reduce to 17 per cent in April 2020. finnCap’s EPS estimate is looking conservative in my view.

Operationally, Avingtrans’ shrewd management team has driven a sustained improvement in the performance of the Hayward Tyler business, acquired in September 2017, which forms part of its engineered pumps and motors division. Finance director Stephen King told me during my results call that the unit, which accounts for almost half of group turnover, posted a 12.3 per cent cash profit margin and, with the benefit of further operational improvements, should lift margins into the 13 to 15 per cent range this year. The unit has secured a number of key contracts this year, including a £10m award with Vattenfall in Sweden for nuclear life extension equipment, and £4.8m of orders to provide critical pumps and spare parts to nuclear reactors in the US and South Korea.

It’s worth noting, too, that higher margin aftermarket sales are increasing as a proportion of the overall revenue mix (up from 42 to 45.5 per cent), a trend that is set to continue, and boosted by the small bolt-on acquisition of Energy Steel, a North American manufacturer of components for the civil nuclear power industry. The U.S.A. is the biggest civil nuclear market in the world, having 99 reactors that account for 30 per cent of the world’s nuclear electricity. Hayward Tyler has over 600 pumps in active service in nuclear applications globally, and the acquisition of Energy Steel expands the company’s product lines for both new and existing customers.

Avingtrans earned £9.4m of cash profit in the 2018/19 financial year which funded £1.1m of dividends, a £2.9m investment in capital expenditure, £400,000 in restructuring acquisitions, and a reduction in net debt from £7.1m to £2m. The proven track record of the board to identify turn round situations, improve their operational performance and then reward shareholders with hefty cash returns when they are sold is the main reason why I included the shares in my market-beating 2017 Bargain Shares Portfolio.

Priced on a substantial discount to analysts’ 335p a share sum-of-the-parts valuations, I maintain my positive stance with the shares rated on a prospective price/earnings (PE) ratio of 15, falling to a PE ratio of 12 in the 2020/21 financial year when finnCap predicts Avingtrans will make EPS of 20.3p. Buy.

[cerrito] 21/9/2019 22:25

The full year results seem to have produced rather a yawn on the board . I have quite a lot of these through pre HAYT and HAYT holdings. The last thing I did was to sell a few January 2018 when I needed cash. I do not see myself buying or selling in the immediate future.They have as they say a strong balance sheet and a comfortable cash position and I cannot see anything negative on the horizon.
I am going on the basis that their wording of pinpointing specific additional acquisitions is that they will be like the Booth one rather than anything big.
My problem is that though I have run into the Chairman before I have no feel for the management. My impression is that the AGM’s are rather perfunctory and not really worth the trip from London but look forward to being put right on this by you on the board.
They seem to be very loath to do IR for retail;their institutional share base does not rotate much which would partly explain the high bid/offer spread but as the %age of shares held by those with 3% plus is 44% which is not all that high they must have quite a large retail following. I was interested to see that the voter turnout at the last AGM was about 1/3rd which does not suggest a very engaged shareholder base.
Good to see they are comfortable they can take Brexit in their stride.
Things that caught me eye:
The increase in AM for EPM between 17/18 and 18/19 from £21.6m to & 35.1m was very impressive as was the increase in OE from £20.1m to £31.5m.
Also good to see EPM big increase in adjusted ebitda between the two years..
Also what was good was the improvement of H2 over H1. Ie operating profit was £1m and £2.6m in the two halves and operating cash flow went up from £1.7m to £7.3m.
When the AR is released I will see if there is anything of interest in the footnotes,

[puffintickler] 26/6/2019 08:02

Very nice update.

Should have topped up at £1.75!

[tomboyb] 11/6/2019 15:26

AVG know it is a very good acquisition -

RHL practically gave it away -

[tomboyb] 11/6/2019 11:51

Fantastic bargain -

[18bt] 11/6/2019 10:22

Agreed, I read as cash and debt free

[cockerhoop] 11/6/2019 10:16

I read that as excluding both cash & debtors ie clean cash & debt free.

[tomboyb] 11/6/2019 10:02

An excellent acquisition -

Not mentioned is the additional cash that BOOTH has, and it EXCLUDES its debtor book -!!

Bargain or what!

Net assets in itself were 2.4million -

[cockerhoop] 11/6/2019 09:56

Booths have made £3m+ profit after tax in the past(2011) and £1.7m PAT as recently as 2017.

AVG currently suggesting minimal contribution in 2019 & 2020.

[tomboyb] 11/6/2019 09:34

That is an excellent acquisition -

Just a shame that RHL shareholders have been screwed over -

[puffintickler] 11/6/2019 09:21

Agree,

High turnover too relative to profit so it looks like AVG could squeeze out some costs by integrating it into their own business.

[18bt] 11/6/2019 07:27

That looks a cracking acquisition from a receiver to Redhall. 6x pre-tax and discount to NAV.

[rogerrail] 03/4/2019 16:42

A nice piece in the local paper, paints a good picture of Stainless Metalcraft. AVG clearly proud of what's going on there and want to publicise the fact. HRH visit was to commemorate the launch of full production of 3M3 boxes, augurs well for near term prospectshtTps://www.elystandard.co.uk/news/princess-anne-visits-metalcraft-in-chatteris-1-5966797

[cerrito] 08/3/2019 21:45

Just got round to looking at the figures.

Given the complications with the HAYT purchase, I compared this last half year to the previous one ending May 2018

Not terribly good reading. Revenue fell from £51.9m to £47.7m and gross profit from £13.9m to £12.2m.
Looking at the Segmental analysis, there was a revenue decline in both the OEM and Aftermarket categories of both Energy units but a pleasing increase in Medical revenue from£5.3m to £6.2m, but as pointed out in my 2714 the operating loss continues.
That said there was a pleasing increase in Energy EPM operating profit from £0.1m to £0.9m.
There was an explanation for the fall in Energy PSRE revenue-delays in contracts and Metalcraft but disappointingly no explanation for the fall in Energy EPM OEM revenue from £8.8m to £7.6m.
I wondered about the fall in Net worth and then saw it was due to the £1.9m IFRS 15 related adjustment.
There was also a fall in Operating cash inflow from £3.6m to £1.7m.
Given these figures understandable that despite the two very good contract wins of the last 2/3 weeks the shareprice has been muted.
Look forward to getting any comments from others

[cockerhoop] 04/3/2019 09:05

Especially liking that's it's for Peter Brotherhood which looked to be languishing under initial HAYT ownership.

[puffintickler] 04/3/2019 08:25

Head of steam building with another £10M HAYT order and a strong hint of more to come.

[cerrito] 27/2/2019 08:07

Had a quick read of what is a very clear and well explained half year report.
I agree with the Chairman that the results are solid and do not see the share price moving out of its trading range as a result of them.
Interested in their comments on continued weakness in oil and gas and need to understand better what sectors they are in
Also see what is going on on Medical.This time last year they had a profit of £75k which had swung to a £184k loss in H2 of the last FY and the loss had increased to £207k in the past half year.

[rhomboid] 18/2/2019 22:00

Hi cerrito it’s in the RNS🙂

‘ A programme of ongoing improvements designed to modernise the reactors and extend their operating life has resulted in this most recent contract, which will be executed over two years between 2020 and 2022’