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REG - Avingtrans PLC - Interim Results

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RNS Number : 4724C  Avingtrans PLC  23 February 2022

23 February 2022

Avingtrans Plc

("Avingtrans", the "Company", or the "Group")

Interim results for the six months ended 30 November 2021

Avingtrans PLC (AIM: AVG), the international engineering group which designs,
manufactures and supplies original equipment, systems and associated
aftermarket services to the energy, medical and industrial sectors, today
announces its interim results for the six months ended 30 November 2021.

Financial Highlights

 •    Group Revenue of £45.1m (2021 H1: £48.7m) in line with management
 •    Gross Margin improved by 190 bps to 33.6% (2021 H1: 31.7%) as a result of
      planned cost reductions and improvements in project margins
 •    Adj.*EBITDA at £5.8m, on lower revenues (2021 H1: £5.8m)
 •    Adj.*EBITDA margin increased to 12.9% (2021 H1: 12.0%)
 •    Adj. Profit before tax £3.6m (2021 H1: £3.7m)
 •    Adj. Diluted Earnings Per Share from continuing operations was slightly down
      to 10.0p (2021 H1:10.8p)
 •    Cash inflow from operating activities of £4.0m (2021 H1: £1.1m)
 •    Net cash excluding IFRS16 debt was £22.7m, (31 May 2021: £23.3m) despite
      investments in Magnetica, Adaptix and various capex projects.
 •    Reinstated interim Dividend of 1.6 pence per share (2021 H1: Nil)

*Adjusted to add back amortisation of intangibles from business combinations,
acquisition costs and exceptional items.

Operational highlights

 •    Revitalisation of Hayward Tyler, Energy Steel and Booth remains on plan
 •    Order book: robust notwithstanding some contract delays
      - Significant Nuclear sector contract wins in the UK and USA.
      - Sellafield 3M3 box project now worth £70m and moves to volume production
      - Exciting potential for Medical in compact, helium-free MRI system
 •    PIE strategy (Pinpoint-Invest-Exit) for organic growth and added value through
      - Magnetica integration proceeding to plan
      - £4.0m investment in Adaptix 3D X-ray completed
      - Exit of HT Luton site hampered by Covid-19, but continuing to pursue

Commenting on the results, Roger McDowell, Chairman, said:

"Our proven Pinpoint-Invest-Exit ("PIE") strategy continues to deliver robust
results, exhibited by an increased gross margin, to deliver a stable adjusted

"The Group continues to invest across its three divisions, with a focus on the
global energy and medical markets, to position them for maximum shareholder
value via eventual exits in the years to come. The MRI system development at
Magnetica is proceeding to plan and we are seeing on-going improvements in
other business units, such as at Booth, as demonstrated by the first half
results. Our value creation targets continue to be accomplished as anticipated
and are underpinned by a conservative approach to debt, which is important
during the on-going crisis.

"Our markets continue to evolve and strategic M&A opportunities remain a
priority for us. Businesses like ours can command high valuations at the point
of exit. Whilst the Board remains vigilant, we are confident about the current
direction and potential future opportunities across our markets.

"Timing of contract revenue recognition has provided management with good
visibility over H2 2022 revenue, despite some Covid-19 induced order delays
and the Board is therefore cautiously optimistic in achieving full year market


 Avingtrans plc                                         013 5469 2391
 Roger McDowell, Chairman

 Steve McQuillan, Chief Executive Officer

 Stephen King, Chief Financial Officer

 Singer Capital Markets (Nominated Adviser and Broker)  020 7496 3000
 Shaun Dobson

 Alex Bond

 Rachel Hayes

 IFC Advisory (Financial PR)                            020 3934 6630
 Graham Herring

 Tim Metcalfe

 Zach Cohen



About Avingtrans plc:


Avingtrans designs, manufactures and supplies original equipment, systems and
associated aftermarket services to the energy, medical and industrial markets


Business units


 Hayward Tyler - Luton & East Kilbride, UK and USA, China and India

 Specialises in the design, manufacture and servicing of performance-critical
 motors and pumps for challenging environments.

 Energy Steel, Inc - Rochester Hills, Michigan, USA

 Provider of custom fabrications for the nuclear industry, specialising in: OEM
 parts obsolescence; custom fabrications; engineering design solutions; product
 refurbishment; on-site technical support.

 Stainless Metalcraft Ltd - Chatteris, UK and Chengdu, China
 Provider of safety-critical equipment for the energy, medical, science and
 research communities, worldwide, specialising in precision pressure and vacuum
 vessels and associated fabrications, sub-assemblies and systems.

 Booth Industries - Bolton, UK

 Designs, manufactures, installs and services doors and walls which can be
 tailored to be: blast & explosion proof; fireproof; acoustically shielded;
 high security/safety; or combinations of the above.

 Ormandy Group, Bradford, UK

 Design, manufacturers and servicing of off-site plant, heat exchangers and
 other HVAC (heating, ventilation and air conditioning) products

 Composite Products Ltd - Buckingham, UK

 Centre for composite technology, parts and assemblies, serving customers in
 industrial markets.

 Magnetica Ltd - Brisbane, Australia

 Magnetica Limited specialises in the development of next generation MRI
 technologies, including dedicated extremity MRI systems and MRI system
 components. Magnetica has successfully built and tested a compact, integrated
 3 Tesla orthopaedic MRI system, demonstrating clinical-quality imaging.
 Commercialisation of this system (and others) is on-going. Magnetica's
 structure now includes two other business units:

 Scientific Magnetics - Abingdon, UK

 Designs and manufactures superconducting magnet systems and associated
 cryogenics for a variety of markets including MRI and provides services for
 Nuclear Magnetic Resonance instruments.

 Tecmag Inc, Houston, USA

 Designs, manufactures and installs instrumentation, including consoles, system
 upgrades, and probes, mainly for Magnetic Resonance Imaging (MRI) and Nuclear
 Magnetic Resonance (NMR) systems.



Chairman's Statement


We are pleased to report another robust first half performance by Avingtrans,
despite the drag factors still being caused by the Covid-19 pandemic. A
creditable and stable revenue performance versus H1 FY21 has again been
enhanced by an improved EBITDA margin, thanks in part to the on-going recovery
progress at Booth. The margin mix improved again versus last year, as a result
of planned cost reductions and improvements in project margins. Pleasingly,
net cash remained close to the year end position, notwithstanding investments
in Magnetica, Adaptix and various capex projects. Despite the Covid-19 delay
effects, new orders have continued to flow. Our supply chains have also
experienced disruption, but we have been broadly able to anticipate and
mitigate these negative effects.


Our proven Pinpoint-Invest-Exit ("PIE") strategy continues to deliver results,
with Booth and Energy Steel still improving. The merger of Magnetica with our
Scientific Magnetics and Tecmag businesses has progressed as planned, with
only minor headwinds along the way. The Magnetica teams have worked hard to
advance the design and build of our own compact MRI product for the
orthopaedics market. The prospects for this new entity are exciting and, as
planned, we invested £1.2m during the period in the new venture, to propel us
towards market launch. To focus on this new activity, we have now almost
completed a phased exit from third-party MRI component manufacture.


The divisional management teams have been resilient in tackling the Covid-19
disruption effects. Furthermore, our plans for aftermarket continue in EPM and
PSRE as we seek to outperform our competitors for a larger share of the
installed base support business, both for our products and theirs. The
improved end-user access provides a predictable and repeatable pipeline and
enhances profitability.  We remain keen to maximise the revenue opportunities
arising from the aftermarket access afforded by our own businesses and through
partnership deals (eg: with Parker Hannifin and Ruhrpumpen).


The Engineered Pumps and Motors (EPM) division saw a first half revenue
decline of 13% year-on-year, with supply chain disruption and contract delays
causing temporary issues, but we believe that this will be rectified in the
second half. Nevertheless, the divisional margins held up well and Energy
Steel's performance was sustained, despite its recent relocation, with further
improvements expected by year end. Although the process has been frustrated by
the pandemic, the negotiations concerning the HT Luton site are on-going.


Process Solutions and Rotating Equipment (PSRE) made up for the shortfall in
EPM, with an 18% increase in revenue vs H1 last year. This was mostly driven
by organic growth, though there were also some businesses transfers, as noted
below. Profits were also enhanced by over 30% versus last year and the
division experienced less disruption from the pandemic than elsewhere. Booth's
excellent recovery curve continues to build momentum and the record order book
is complemented by increasing revenues and growing profits. Year-on-year
profits were also up at Ormandy and HT Fluid Handling. The division has
refined its offering to the UK nuclear market - especially to Sellafield, for
nuclear decommissioning - where divisional businesses working as a team (eg:
Fluid Handling and Metalcraft) have created new business wins. Post-period
end, we completed the bolt-on acquisition of mixer business Transkem, which is
now co-located with Fluid Handling in East Kilbride, Scotland. Composite
Products and Metalcraft China moved into the PSRE division at the start of the
period. Although Composites first half was affected by supply chain issues,
there was no material impact on the division.


Last, but not least, is the Medical division, where the merger of Magnetica,
Sci Mag and Tecmag has created a new MRI OEM, capable of designing and
manufacturing entire systems in-house and providing the opportunity to enter
and disrupt the medical imaging market. First products for clinical testing
are expected to be ready by Q4 2022. We are seeking to target those markets
which currently lack effective MRI solutions, such as orthopaedics, neonatal
and veterinary.  During the period, we made a complementary initial
investment in the emerging "medtech" business, Adaptix, which is seeking to
disrupt the adjacent X-ray imaging market with a novel product and business
model. Post-period-end, we increased our total stake in Adaptix to £4m,
representing 11.9% of their issued share capital. As planned, Metalcraft has
largely completed the corollary phased exit from third-party MRI component
manufacturing, leaving Magnetica unconstrained.


Following another period of solid performance, the Board are reinstating an
interim dividend of 1.6 pence per share. It is pleasing to resume our
commitment to long term shareholder returns. Our positive view of the
prospects for the Group, underpinned by our fiscal conservativism, support
this decision.


In conclusion, the Board once again thanks all Avingtrans employees for their
steadfastness over the preceding, challenging months. We continue to look
forward with cautious optimism and enthusiasm to the period ahead.



Roger McDowell


22 February 2022



Strategy and business review


Group Performance


Avingtrans has a Pinpoint-Invest-Exit (PIE) business model, which drives
improvements in design, original equipment manufacture (OEM) and associated
aftermarket services, affording the Group an improving margin mix, both in the
near and longer term. The Group has progressively shifted to an OEM based
strategy over time, away from build to print. Our Energy divisions, comprising
Engineered Pumps and Motors and Process Solutions and Rotating Equipment, form
the bulk of Avingtrans' operations. Effective longer-term development of the
Group's smaller Medical Imaging division is also a core focus for management
to create shareholder value.




Avingtrans is an international precision engineering group, operating in
differentiated, specialist markets, within the supply chains of many of the
world's best known engineering original equipment manufacturers (OEMs), as
well as positioning itself as an OEM to end users. Our core strategy is to
build market-leading niche positions in our chosen market sectors - currently
focused on the Energy and Medical sectors. Over the longer term, our
acquisition strategy has enabled our businesses to develop the critical mass
necessary to achieve leadership in our chosen markets.


Our strategy remains consistent with previous statements. The Group's
unrelenting objective is to continue the proven strategy of "buy and build" in
regulated engineering markets, where we see consolidation opportunities,
potentially leading to significantly increased shareholder returns over the
medium to long term. At the appropriate time, we will seek to crystallise
these gains with periodic sales of businesses at advantageous valuations and
return the proceeds to shareholders. We call this strategy PIE -
"Pinpoint-Invest-Exit". Previous deals, such as the disposal of Peter
Brotherhood in 2021, have clearly demonstrated the success of this approach,
producing substantial increases in shareholder value. We have built strong
brands and value from smaller constituent parts; we have demonstrated
well-developed deal-making skills and prudence in the acquisition of new


The Board continues to focus on improvements in Hayward Tyler's operations,
along with driving the performance of Booth, Metalcraft and Energy Steel. This
programme is progressing to plan. We are also focused on the opportunity to
transform the medical imaging division's performance, thanks to the merger of
Magnetica with Scientific Magnetics and Tecmag, as well as the more recent
investments in Adaptix. The objective for the Group is to become a leading
supplier in targeted energy and medical markets, of operation critical
products, with a reputation for high quality and delivery - on-time and
on-budget. The Group has production facilities in its three key geographical
markets (the Americas, Asia and Europe) with higher volume/lower cost
facilities in Asia, and product development and realisation in the UK, the USA
and Australia. The Group will continue to invest in breakthrough and
disruptive technologies in the energy and medical markets.


Avingtrans' primary focus in Energy is the nuclear sector - harvesting
opportunities in decommissioning, life extension and next generation nuclear
markets. We are also engaged with a variety of other niches in the renewable
energy sector. The Directors will continue to build on our footprint in the
wider power and energy sectors.


After the HTG acquisition in 2017, to maximise long term shareholder value via
our PIE strategy, we reorganised the Energy assets of the Group into two
distinct divisions:

 •    Engineered Pumps and Motors (EPM) consisting of Hayward Tyler's units in the
      UK, USA, China and India and Energy Steel, acquired in June 2019.
 •    Process Solutions and Rotating Equipment (PSRE) consisting of Metalcraft,
      Peter Brotherhood, Ormandy, the Fluid Handling business in Scotland, Composite
      Products and also Booth Industries, acquired in June 2019. Peter Brotherhood
      was subsequently sold, for £35m, in March 2021.

In parallel, the focus of the Group's Medical Imaging division (MII) has
evolved, to focus on becoming a market leader in the production of compact,
superconducting, cryogen-free MRI systems, targeted at specific applications
including orthopaedic imaging and veterinary imaging. Whilst production of
certain existing products will continue, to support the division overall,
Metalcraft has largely completed a phased exit of third-party MRI component
manufacture. This division now consists of Magnetica in Australia (majority
stake acquired in January 2021) which has been successfully integrated with
Scientific Magnetics and Tecmag in the USA.  Subsequently, we have sought to
further strengthen our medical imaging strategy, via investment in Adaptix in
Oxford, UK.


Our businesses have the capability to engineer products in developed markets
and to produce those products partly, or wholly, in low-cost-countries, where
appropriate. This allows us and our customers to access low-cost sourcing at
minimum risk, as well as positioning us neatly in the development of the
Chinese, Indian and other Asian markets for our products. We are well
established in China, providing integrated supply chain options for our
blue-chip customers.


An overarching strategic theme for Avingtrans, is to proactively nurture and
grow the proportion of our business stemming from aftersales. We are targeting
both our own installed base and the wider competitive installed base of such
equipment, in areas where we can offer an advantage to our end-user customers.
This focus now applies mainly to our Energy businesses, with the Medical
division now strategically pivoting to new products and services.


Energy - Engineered Pumps and Motors ("EPM")


For Hayward Tyler ("HT"), the main priorities remain to strengthen the
aftermarket capabilities and to maximise opportunities in the nuclear life
extension market. The division suffered from Covid-19 induced order delays in
H1, which meant reduced revenue and profit. However, the delayed orders have
now either been received post period end or are pending and we therefore
expect the division to be in line with expectations for the year as a whole.


At HT Luton, aftermarket activities remain the focus, including the servicing
of third-party equipment. The £10m contract in Sweden with Vattenfall for the
Forsmark plant (for nuclear life extension) will complete this year and the
majority of the cash should be collected by the year end. Further defence
orders have been received and are being executed on target. However,
hydrocarbon related orders were still somewhat disrupted by Covid-19, as were
the regional supply chains, though the situation is gradually improving. We
are still progressing with the sale of the Luton site, albeit that this
process has, as previously noted, been elongated by Covid-19.


HT Inc in Vermont (USA) again suffered from some Covid-19 order delays in H1,
but the majority of these contracts are expected to be confirmed in H2. HT Inc
continues to see solid order intake in the nuclear life extension market in
the USA. HT Inc's new R&D opportunities in next generation nuclear power
have made good progress, with further TerraPower prototype products shipped in
the period.


HT Kunshan (China) has been less affected by Covid-19 overall and has seen
solid order intake, including an improving position in the aftermarket


In India, Covid-19 delays continued to cause issues, but the local team
weathered the storm well and the H1 performance was satisfactory.


Energy Steel ('ES') in Michigan (USA), continues to recover steadily, with
some significant new orders confirmed post period end, notably from ITER. ES
is now well settled-in to its new building in Rochester Hills, having exited
the previous building at the end of FY21.


Energy - Process Solutions and Rotating Equipment ("PSRE")


Whilst there is now a less broad opportunity following the exit of PB, PSRE is
equally focused on the aftermarket, where feasible, which is improving the
margin mix. PSRE was less affected by Covid-19 delays in H1, resulting in
materially improved revenue and profit, which compensated for the delays seen
at EPM.


Metalcraft's progress with the Sellafield 3M3 ("three-metre-cubed") boxes was
rewarded with the June 2021 award of phase 2 of the contract, now worth £70m
in total over the next six years. The next 3M3 box contract tender, expected
to be worth over £900m, is expected to be tendered in 2023 by Sellafield. At
the Chatteris site, construction of the new training centre is nearing
completion. This is a landmark building for the town and a boost for local
apprenticeships, which dovetails neatly with the Government's "levelling-up"
agenda. Metalcraft in China is wrapping-up its activities for Siemens on MRI
component supply and turning its attention to other opportunities.


Ormandy's performance was solid in the period and order intake remains robust.
The pandemic may provide opportunities for us to capitalise on Ormandy's
position in the HVAC sector.


Booth Industries has sustained a positive trajectory, responding well to the
Avingtrans PIE treatment. A record order book, including the £36m order for
HS2 cross-tunnel doors, continues to build. The HS2 project momentum is
building, with the proposal for the next phase recently laid before
parliament. Although Covid-19 caused delays to the new building extension in
Bolton, the construction work is now complete and operations have commenced in
the facility, which incorporates a range of energy saving measures.


The Fluid Handling business in Scotland has been a consistently good performer
since acquisition and has fitted well into our ambitions to build a wider
nuclear capability. The business has maintained a strong order book and this
was bolstered by the (post-period-end) bolt-on acquisition of Transkem,
specialising in industrial mixers.


Finally, Composite Products had a subdued first half, with some supply chain
issues holding back results, although the impact on the group was not


Medical and Industrial Imaging ("MII")


The merger of Scientific Magnetics (SciMag) and Tecmag with Magnetica has
continued to progress well with the three businesses meshing effectively. The
key objective is to produce compact, superconducting, helium-free MRI systems
entirely in-house. The merger also added complementary capabilities in system
architecture, asymmetric magnet design and gradient and radio frequency (RF)
coil manufacture to our previous knowhow.


Our initial estimate of the addressable orthopaedic imaging market is circa
£400m p.a. (Approximately 10% of the total MRI hardware and service market).
However, our intended "pay per scan" business model could mean that the
opportunity is significantly larger.  It is more difficult to quantify other
market segments (eg: veterinary imaging) at this stage, because there are no
available equivalent, dedicated products. We have invested an additional
£1.2m in Magnetica thereby increasing our shareholding to 60.0% of the issued
share capital. The plan remains for Magnetica to have orthopaedic MRI products
ready for clinical testing in late 2022, despite some supply chain delays to
the programme. We believe that materially reducing the size and total costs of
these dedicated MRI systems, coupled with them being much easier to set-up in
a variety of locations, as well as increasing the scan rate by up to 300%,
will produce a compelling sales proposition. In addition, these dedicated
systems could free-up capacity on the existing MRI system installed base,
which should be a major benefit to healthcare organisations.


SciMag and Tecmag will rebrand to Magnetica in due course, to present a
seamless image of the new entity. However, there is still merit in continuing
with various existing products and services at SciMag and Tecmag, so long as
they do not detract from our core vision for MRI, which holds out the prospect
of materially increasing the value of Magnetica over the coming years.


In the half, Avingtrans made an initial investment of £2.5m in Adaptix,
Oxford, UK, with another £1.5m invested post-period-end. This £4m investment
represents 11.9% of Adaptix's issued share capital. Adaptix has recently
launched a compact 3D x-ray system for orthopaedic and veterinary
applications, with an encouraging market response. The strategies of Magnetica
and Adaptix are convergent, and we see potentially large benefits in combining
their approaches to market in technology, software, distribution channels
amongst others.


As planned, Metalcraft's UK and China businesses have now largely exited from
third-party MRI component manufacturing.  Metalcraft now reports entirely
within the PSRE division, as does Composite Products. The MRI components exit
and business transfers result in previously forecast c.80% reduction in
Medical revenues versus H1 last year.


Markets - Energy


The global demand for energy experienced a hiatus due to Covid-19 but we are
seeing a consistent return to growth and the effect of the pandemic may be to
drive faster towards increased efficiency and decarbonisation. This trend may
benefit our businesses in the nuclear and renewables sectors.


End User/Aftermarket


Operators and end-users demand a blend of quick response through local support
and a requirement to drive improvements through equipment upgrades and
modernisation. In the West, where facilities are being operated for longer
than their intended design lives, there is a strong demand for solution
providers in the supply chain to partner with end-users for the longer term.
The Avingtrans energy divisions are well positioned to grow in this end-user
market space.




Nuclear energy as a low carbon, baseload power source remains an asymmetric
market with respect to future growth. Almost all the 1GW+ new build
opportunities are currently in Asia, with the exception of the limited UK
programme. However, certain market segments remain robust, including
supporting the operational fleet, continued safe operation and life
extensions, decommissioning and reprocessing. We are also working on the
long-term development of the next generation of technologies, such as Small
Modular (SMR), or Advanced Generation IV Reactors - eg with TerraPower. In
addition, these segments have a consolidating supply chain and a lack of
expert knowledge.


The USA still operates the biggest civil nuclear fleet in the world, with 94
reactors generating around 30 percent of the world's nuclear electricity.
Coupled with the heritage Westinghouse technology operating in Europe and
Asia, the EPM division's long-standing position in this market provides
opportunities for further growth.  Obsolescence and life extension are key
issues for nuclear operators worldwide and the Avingtrans Energy Divisions are
well positioned to support operators in addressing this critical risk. Energy
Steel bolstered the Group's capabilities in this regard.


The UK remains pre-eminent when it comes to decommissioning and reprocessing,
in terms of innovative technology and overall spend. The Group is embedded in
the future manufacture of waste containers for Sellafield and will continue to
expand its presence in the UK and globally in the longer term. The development
of new nuclear technologies is ongoing, with pockets of activity in the UK,
South Korea, the USA and China dominating development activity. The Group
views these new technologies as an attractive route forward for nuclear and is
well positioned to develop as a global industry partner.


Power Generation


The world continues to electrify, with an increasing amount of primary energy
going to the power sector, which remains a key focus across the Group's energy
divisions. Aside from nuclear, the main sub-sectors are as follows:


Coal - the Group continues to see good aftermarket activity from coal fired
power stations even though the demand for new power stations is in decline.
Opportunities still exist in India, China, South East Asia, Eastern Europe and
the Middle East. EPM is optimising its product line to take market share and
to create tomorrow's aftermarket.


Gas - natural gas, primarily in the form of combined cycle gas turbine power
plants is a growing market space, primarily in the West.  The Group is moving
into this market with both existing and new product lines.


Renewables - renewable technologies and their supporting infrastructure are a
growing market globally. The Group has a range of products that can be applied
directly to this market segment and also has expertise that can be used to
develop new products for niche parts of this market such as molten salt for
concentrated solar applications.




As oil demand has picked up following the pandemic easing, so the oil price
has followed and the Brent crude price is now trading in the range of $90 to
$95 per barrel, with informed forecasts suggesting a price of $100 a barrel is
possible next year. As a result, new capital expenditure in this sector has
recently begun to recover but our forecasts continue to exhibit prudence, with
some limited restructuring activity in EPM being completed in the half, mainly
due to the relocation of Energy Steel. Aftermarket orders continue to


Markets - Medical


The diagnostic imaging market is a large global sector, dominated by a few
large systems manufacturers. In 2020, the total Diagnostic Imaging Market was
estimated to be worth$33.5bn, according to ResearchAndMarkets and is expected
to continue to grow at over 5% per annum until 2027. The largest market is the
USA, followed by Europe and Japan. The fastest growing markets are China and


Following the acquisition of a majority stake in Magnetica (AUS) in January
2021, we merged Magnetica with Scientific Magnetics (UK) and Tecmag (US), to
create an innovative, niche-MRI systems supplier, which can address specific
parts of the market, not well served by dedicated products at present. This
includes orthopaedic and veterinary imaging. Although Magnetica is primarily
targeting the Magnetic Resonance Imaging (MRI) market, Nuclear Magnetic
Resonance (NMR) and magnets for physics continue to be of interest, due to the
similar requirements for superconducting magnets and cryogenics. Market
drivers for MRI include: an increased incidence of chronic diseases; the rise
in geriatric populations; growing awareness about early benefits of diagnosis;
and the introduction of advanced systems with superior image quality.


According to ResearchAndMarkets, MRI itself is approximately 19% by value of
the total diagnostic Imaging market and is projected to grow at 5.4% p.a.  In
the period, our initial investment in Adaptix allowed us access to the X-ray
segment of diagnostic imaging. X-ray itself represents circa 32% of the total
market. For both Magnetica and Adaptix, the portion of the X-ray and MRI
markets we believe we can access is over 20% of the total, representing a
potential addressable market of over $3bn.


End User/Aftermarket


The MRI market segment is dominated by a handful of manufacturers, including
GE, Siemens, Philips and Canon, who account for circa 80% of revenue globally.
These players also dominate the aftermarket, although there are a few
independent MRI service businesses in existence. Magnetica is not present in
the MRI aftermarket at this time but will naturally service the aftermarket
for its own products once these are launched.


As noted above, the MRI market segment is dominated by a handful of global
manufacturers and we do not intend to compete with them directly, since we are
planning to create new niche markets for MRI. However, following the pivot to
niche full system supply, Avingtrans has moved in parallel to exit third-party
MRI component supply and this process is almost complete. We note a
significant reduction in divisional revenues year on year (c80%), with a
resultant net operating loss, as component manufacture ends, since there is
now a gap before we launch our own systems. Our first target is orthopaedic
imaging, where encouraging development of our prototype system is on-going.
The earliest commercial launch of this product could be later in 2023, subject
to regulatory approval in target markets.  In the period, Adaptix launched
its first 3D X-ray product - also targeted at orthopaedic imaging.




High security and integrity doors were a new market for the Group, following
the acquisition of Booth. Global safety and security concerns, as well as risk
mitigation on large infrastructure projects, are key drivers for growth at
Booth and we are cultivating these opportunities carefully. Thus far, most of
Booth's sales are still in the UK but recent market research shows that there
is untapped international potential, in certain compatible markets. We also
believe that there is an aftermarket opportunity, which is now being


Threat detection standards for baggage handling at airports and package
scanning have been tightened everywhere around the world - especially in
Europe and the USA. With many millions of bags and packages flowing across
border crossings every day, screening devices have to comply with threat
detection standards without impacting throughput. Rapiscan, the biggest
customer for Composite Products, is a market leader in this sector, whose
presence is increasing as new standards are rolled out.


Financial Performance


Key Performance Indicators


The Group uses a number of financial key performance indicators to monitor the
business, as set out below. The Company publishes more detailed and
operational KPIs in its annual report.


Revenue: slight reduction, driven, as expected by the Medical division


Overall Group revenue decreased by 7.3% to £45.1m (2021 H1: £48.7m).
Although the pandemic continued to affect group results, the main driver in
year-on-year revenue reduction was the previously announced decision to exit
MRI component manufacturing, as we pivot to our own imaging products combined
with some delayed orders in EPM.


Gross margin ('GM') incrementally improving


GM improved to 33.6% (2021 H1: 31.7%) driven by on-going product mix
improvement and aftermarket margins.


Profit margin: EBITDA flat, with improving margin on reduced revenues


Adjusted EBITDA (note 4) was flat at £5.8m, on lower revenues (2021 H1:
£5.8m) despite the anticipated revenue and profit reduction in the Medical
division, resulting from the planned MRI component manufacturing exit. This
was mainly due to the improved margin mix in the PSRE division, with Booth
continuing to recover well. EPM's margin increased, due to the relative
percentage of AM business, offsetting the overall Divisions' H1 revenue
decrease, as a result of delayed orders.


Tax: future profits and cash protected by available losses


The effective rate of taxation at Group level was a 8.1% tax charge (2021 H1:
8.3%). A slight reduction from H1 FY21, due to the utilisation of losses
previously recognised as a deferred tax asset and the recognition of
additional losses previously unrecognised. A prior year adjustment was also
made for a tax credit for US taxes.  The Group tax position will continue to
be aided in the coming years by the utilisation of losses available in the UK,
US and China.


Adjusted Earnings per Share (EPS):


Adjusted diluted earnings per share from continuing operations was slightly
down to 10.0p (2021 H1:10.8p), due to the underlying cost, resulting from the
Medical division concentrating on the development of the MRI project
offsetting overall improved results in the Energy divisions. After adjusting
out the Non Controlling Interest (NCI) element (arising from the Minority
interest in the Medical Division), the Adjusted diluted earnings per share for
H1 2021 would be 10.7p (2021 H1:10.8p).


Basic and diluted earnings per share from continuing operations increased to
9.0p (2021: 6.9p) and to 8.7p (2021 H1: 6.8p).


Funding and Liquidity: net cash position remains robust


Net cash was £22.7m, excluding IFRS16 debt (31 May 2021: £23.3m). Cash was
maintained at close to the year end level, despite the previously highlighted
investment in Magnetica, Capex (mainly building extension at Booth) in the
period and our initial £2.5m investment in Adaptix. Cash inflow from
operating activities in the period was £4.0m (2021 H1: £1.1m) after a £1.3m
increase in working capital.


Dividend: interim dividend to be reinstated.


The Board is  reinstating its   progressive dividend policy for the
interims, following the suspension last year, due to Covid-19. The dividend is
1.6 pence per share. The dividend will paid on 17 June 2022, to shareholders
on the register at 13 May 2022.


ESG (Environmental, Social, and Governance)


Avingtrans is endeavouring to attain a high level of clarity on ESG matters.
We will be reporting on these topics once more in our next Annual Report.
However, we comment on some ESG related matters below, to keep our investors




As announced earlier today, Jo Reedman will join the Board from 1(st) March
2022 as an independent non-executive director. As a former Capital Goods City
analyst, Jo brings a wealth of knowledge in many of our key markets and
experience to Avingtrans and we warmly welcome her to the Board. There were no
other changes at Board or divisional management level.


We continue to strengthen the management teams in the divisions, with further
appointments being made in the period and with an emphasis on aftermarket
opportunities, notably at Booth. Skills availability is always challenging,
especially so after the pandemic, but we do not expect to be materially
disadvantaged in the market. We continue to invest significant effort in
developing skills and talent, both through structured apprenticeship
programmes and graduate development plans, across a number of business units.
The construction of the apprentice training school based at Metalcraft is
nearing completion and, post-period end, we have partnered with West Suffolk
College (WSC) to be the operator and training provider at the centre. The
Group continues to be recognised nationally for the strength of its
apprenticeship training schemes.


Health, Safety and Environment (HSE)


The Group takes HSE matters and its related responsibilities very seriously.


As regular acquirers, we find varying levels of capability and knowledge
across different businesses. Often, a key investment need in smaller
acquisitions, is to spread HSE best practice from other Group businesses and
bring local processes up to required standards. Larger acquisitions (eg HTG)
generally have well developed HSE practices and we seek to learn from these in
other business units. Health and Safety incident reporting has improved across
the Group and incident trends have generally been improving over recent years.
Near miss reporting and knowledge exchange is also positively encouraged, to
facilitate learning and improvement. At Board level, Les Thomas has HSE
oversight and he conducts inspections and reviews with local management, as


The Group's environmental policy is to ensure that we understand and
effectively manage the actual and potential environmental impact of our
activities. Our operations are conducted such that we comply with all legal
requirements relating to the environment in all areas where we carry out our
business. During the period covered by this report, the Group has not incurred
any significant fines or penalties, nor been investigated for any
significant breach of HSE regulations.


Covid-19 has again been the biggest health and safety issue for the Group,
along with everyone else. Fortunately, the nature of our products and the
topography of our factories have given us a good base to work from, to make
our workplaces Covid-19 safe. We have an overall set of guidelines to work to,
derived from government policies around the world and local teams in each
business adapt these to the specifics of their individual site. These measures


 •    Shielding of vulnerable employees
 •    Working from home where feasible
 •    Factory and office re-layouts to facilitate social distancing
 •    Enhanced cleaning and site hygiene
 •    Additional use of PPE equipment where necessary
 •    Minimisation and careful management of third-party visitors to our sites


Where our employees have to visit other third-party sites, they have protocols
from their business unit to follow and must also adhere to the policies and
procedures of the site which they are visiting. Each business has a team
responsible for ensuring that the Covid-19 plan is kept up to date and
adapted, if required, as the circumstances of the pandemic have evolved. Taken
as a whole, these measures have allowed us to operate at a high level of
effectiveness throughout the pandemic and ensured that we have minimised any
loss of output, whilst keeping employees safe.


Social Responsibility


The Group maintains the highest ethical and professional standards across all
of its activities and social responsibility is embedded in operations and
decision making. We understand the importance of managing the impact that the
business can have on employees, customers, suppliers and other stakeholders.
The impact is regularly reviewed to sustain improvements, which in turn
support the long-term performance of the business. Our focus is to embed the
management of these areas into our business operations, both managing risk and
delivering opportunities that can have a positive influence on our business.


The Group places considerable value on the involvement of its employees and
has continued to keep them informed on matters affecting them directly and on
financial and broader economic factors affecting the Group. The Group
regularly reviews its employment policies. The Group is committed to a global
policy of equality, providing a working environment that maintains a culture
of respect and reflects the diversity of our employees. We are committed to
offering equal opportunities to all people regardless of their sex,
nationality, ethnicity, language, age, status, sexual orientation, religion or


We believe that employees should be able to work safely in a healthy
workplace, without fear of any form of discrimination, bullying or harassment.
We believe that the Group should demonstrate a fair gender mix across all
levels of our business, whilst recognising that the demographics of precision
engineering and manufacturing remain predominantly male, which is, to an
extent, beyond our control.


Ethical policy


The Group complies with the Bribery Act 2010. We do not tolerate bribery,
corruption or other unethical behaviour on the part of any of our businesses,
or business partners in any part of the world. Employee training has been
refreshed in all areas of the business, to ensure that the Act is complied




Avingtrans is a niche engineering market leader, predominantly in selected
Energy and Medical sectors, with a successful profitable growth record,
underpinned by our successful 'PIE' strategy. Acquisitions provide further
opportunities for the Group to build enduring value for investors in resilient
engineering market niches. As ever, we remain frugal and seek to crystallise
value and return capital when the timing is right, as part of the PIE strategy
implementation, as demonstrated again in 2021, with the valuable exit of Peter
Brotherhood. We believe that our PIE strategy has served us well in the Covid
crisis and could result in further opportunities to grow shareholder value.


The Group continues to invest across its three divisions, with a focus on the
global energy and medical markets, to position them for maximum shareholder
value via eventual exits in the years to come. The integration of Magnetica is
proceeding to plan and we are seeing on-going improvements in other business
units - eg at Booth, as demonstrated by the first half results. Our value
creation targets continue to be accomplished as planned and are underpinned by
a conservative approach to debt, which is important during the on-going


The energy divisions have a strong emphasis on the nuclear power, thermal and
hydrocarbon markets and the associated aftermarkets. The medical division has
successfully pivoted to focus on novel compact MRI systems for niche
applications. To drive profitability and market engagement, each division has
a clear strategy to support end-user aftermarket operations, servicing their
own equipment and that of pertinent third parties, where appropriate, to
capitalise on the continued customer demand for efficient, reliable and safe


The on-going disruption caused by the pandemic remains our biggest uncertainty
and we have continued to experience supply chain disruptions and contract
delays. However, these issues now appear to be easing in the second half.
Inflationary pressures are beginning to have an impact on our businesses, but
we are broadly able to mitigate these risks, to maintain stable margins.


Our markets continue to evolve and strategic M&A opportunities remain a
priority for us. Businesses like ours can command high valuations at the point
of exit. Whilst the Board remains vigilant, we are confident about the current
direction and potential future opportunities across our markets. We will
continue to refine our strategy by pinpointing specific additional
acquisitions, as the opportunities arise, to build businesses which can create
sustainable shareholder value, whilst maintaining a prudent level of financial
headroom, to buffer us against any unforeseen headwinds, whether deriving from
Covid-19, inflation, or elsewhere.


 Roger McDowell                                   Steve McQuillan                                  Stephen King

 Chairman                                         Chief Executive Officer                          Chief Financial Officer

 22 February 2022                                 22 February 2022                                 22 February 2022




Consolidated Income Statement (Unaudited)

for the six months ended 30 November 2021



                                                                      6 months to                  6 months to                  Year to
                                                                      30 Nov                       30 Nov                       31 May

                                                                      2021                         2020                         2021
                                                                      £'000                        £'000                        £'000

 Revenue                                                              45,128                       48,699                       98,516

 Cost of sales                                                        (29,973)                     (33,271)                     (68,586)

 Gross profit                                                         15,155                       15,428                       29,930
 Distribution costs                                                   (1,577)                      (1,536)                      (3,024)
 Other administrative expenses                                        (10,467)                     (11,103)                     (20,821)
 Operating profit before amortisation of acquired intangibles, other
 non-underlying items and exceptional items

                                                                    3,683                        4,004                        8,188

 Amortisation of intangibles from business combinations

                                                                      (404)                        (525)                        (1,008)
 Other non-underlying items                                           (76)                         (52)                         (90)
 Acquisition costs                                                    -                            -                            (234)
 Restructuring costs                                                  (92)                         (638)                        (771)

 Operating profit                                                     3,111                        2,789                        6,085

 Finance income (Note 5)                                              145                          8                            73
 Finance costs (Note 5)                                               (137)                        (390)                        (711)

 Profit before taxation                                               3,119                        2,407                        5,447
 Taxation (Note 3)                                                    (252)                        (199)                        (383)

 Profit after taxation from continuing operations                     2,867                        2,208                        5,064

 (Loss)/profit after taxation from discontinuing operations           -                            (950)                        22,136

 Profit for the financial period                                      2,867                        1,258                        27,200

 Profit is attributable to:

 Owners of Avingtrans PLC                                             3,111                        1,258                        27,366

 Non-controlling interest                                             (244)                        -                            (166)

 Total                                                                2,867                        1,258                        27,200

 Profit per share:
 From continuing operations
 - Basic (Note 6)                                                     9.0p                         6.9p                         15.9p
 - Diluted (Note 6)                                                   8.7p                         6.8p                         15.6p
 From continuing and discontinuing operations
 - Basic (Note 6)                                                     9.0p                         4.0p                         85.4p
 - Diluted (Note 6)                                                   8.7p                         3.9p                         83.6p






Consolidated statement of comprehensive income (Unaudited)

for the six months ended 30 November 2021


                                                                        6 months to               6 months to                Year to
                                                                        30 Nov                    30 Nov                     31 May

                                                                        2021                      2020                       2021
                                                                        £'000                     £'000                      £'000

 Profit for the period                                                  2,867                     1,258                      27,200
 Items that will not be subsequently be reclassified to profit or loss
 Remeasurement of net defined benefit liability                         -                         -                          (662)
 Income tax relating to items not reclassified                          -                         -                          49
 Items that may/will subsequently be reclassified to profit or loss
 Exchange differences on translation of foreign operations              631                       (602)                      (1,162)

 Total comprehensive profit for the period                              3,498                     656                        25,425





Summarised consolidated balance sheet (Unaudited)

at 30 November 2021


                                                            30 Nov                            30 Nov                            31 May

                                                            2021                              2020                              2021
                                                            £'000                             £'000                             £'000
 Non current assets
 Goodwill                                                   21,233                            23,459                            21,222
 Other intangible assets                                    14,547                            13,239                            14,464
 Property, plant and equipment                              25,013                            32,330                            25,281
 Investments                                                2,500                             -                                 -
 Deferred tax asset                                         1,757                             1,262                             1,767
 Pension and other employee obligations                     1,425                             1,782                             1,284

                                                            66,475                            72,072                            64,018

 Current assets
 Inventories                                                11,756                            15,326                            10,076
 Trade and other receivables: falling due within one year   38,293                            41,220                            36,010
 Trade and other receivables: falling due after one year    1,650                             -                                 1,798
 Current tax asset                                          598                               522                               633
 Cash and cash equivalents                                  29,304                            7,277                             30,078

                                                            81,601                            64,345                            78,595

 Total assets                                               148,076                           136,417                           142,613

 Current liabilities
 Trade and other payables                                   (28,511)                          (33,376)                          (26,587)
 Lease liabilities                                          (1,020)                           (1,775)                           (1,310)
 Borrowings                                                 (4,799)                           (9,271)                           (2,160)
 Current tax liabilities                                    (309)                             (48)                              (672)
 Provisions                                                 (1,711)                           (5,254)                           (1,742)
 Derivatives                                                (6)                               (105)                             (144)

 Total current liabilities                                  (36,356)                          (49,829)                          (32,615)

 Non-current liabilities
 Borrowings                                                 (839)                             (3,707)                           (3,368)
 Lease liabilities                                          (2,691)                           (8,386)                           (2,965)
 Deferred tax                                               (4,094)                           (2,224)                           (3,456)
 Contingent consideration                                   -                                 (256)                             -
 Other creditors                                             (1,235)                          (1,245)                           (1,246)

 Total non-current liabilities                              (8,859)                           (15,818)                          (11,035)

 Total liabilities                                          (45,215)                          (65,647)                          (43,650)

 Net assets                                                 102,861                           70,770                            98,963

 Share capital                                              1,607                             1,593                             1,599
 Share premium account                                      15,663                            15,118                            15,347
 Capital redemption reserve                                 1,299                             1,299                             1,299
 Translation reserve                                        (73)                              (172)                             (732)
 Merger reserve                                             28,949                            28,949                            28,949
 Other reserves                                             1,457                             180                               1,457
 Investment in own shares                                   (4,235)                           (4,235)                           (4,235)
 Retained earnings                                          56,332                            28,039                            53,614

 Total equity attributable to equity holders of the parent  100,999                           70,770                            97,298

 Non-controlling interest                                   1,862                             -                                 1,665

 Total equity                                               102,861                           70,770                            98,963



Consolidated statement of changes in equity (Unaudited)

at 30 November 2021




                                                             Share     Share     Capital   Merger    Trans     Other      Investment in own shares  Retained earning  Total

                                                             capital   premium   redemp    reserve   lation    reserves                                               Attributable owners of the Group

                                                                       account   tion                reserve                                                                                             Non-controlling interest

                                                                                 reserve                                                                                                                                            Total

                                                             £'000     £'000     £'000     £'000     £'000     £'000      £'000                     £'000             £'000                              £'000                      £'000

 At 1 June 2020                                              1,588     14,970    1,299     28,949    430       180        (4,235)                   26,727            69,908                             -                          69,908
 Ordinary shares issued                                      5         148       -         -         -         -          -                         -                 153                                -                          153
 Share-based payments                                        -         -         -         -         -         -          -                         54                54                                 -                          54
 Total transactions with owners                              5         148       -         -         -         -          -                         54                207                                                           207


 Profit for the period                                       -         -         -         -         -         -          -                         1,258             1,258                              -                          1,258

 Other comprehensive income
 Exchange rate loss                                          -         -         -         -         (602)     -          -                         -                 (602)                              -                          (602)
 Total comprehensive income for the period                   -         -         -         -         (602)     -          -                         1,258             656                                                           656

 Balance at                                                  1,593     15,118    1,299     28,949    (172)     180        (4,235)                   28,039            70,770                                                        70,770

 30 Nov 2020

                                                             1,593     15,118    1,299     28,949    (172)     180        (4,235)                   28,039            70,770                             -                          70,770

 At 1 Dec 2020
 Ordinary shares issued                                      6         229       -         -         -         -          -                         -                 235                                -                          235
 Magnetica acquisition                                       -         -         -         -         -         -          -                         -                 -                                  1,831                      1,831
 Gain on disposal of non-controlling interest in subsidiary  -         -         -         -         -         1,278      -                         -                 1,278                              -                          1,278
 Share-based payments                                        -         -         -         -         -         -          -                         79                79                                 -                          79
 Total transactions with owners                              6         229       -         -         -         1,278      -                         79                1,592                              1,831                      3,423

 Profit for the period                                       -         -         -         -         -         -          -                         26,108            26,108                             (166)                      25,942

 Other comprehensive income
 Actuarial gain for the period on pension scheme             -         -         -         -         -         -          -                         (662)             (662)                              -                          (662)
 Deferred tax on actuarial movement on pension scheme        -         -         -         -         -         -          -                         49                49                                 -                          49
 Exchange rate loss                                          -         -         -         -         (560)     -          -                         -                 (560)                              -                          (560)
 Total comprehensive income for the period                   -         -         -         -         (560)     -          -                         25,495            24,935                             (166)                      24,769
 Balance at                                                  1,599     15,347    1,299     28,949    (732)     1,458      (4,235)                   53,614            97,298                             1,665                      98,963

 31 May 2021
                                                             1,599     15,347    1,299     28,949    (732)     1,458      (4,235)                   53,614            97,298                             1,665                      98,963

 At 1 June 2021
 Ordinary shares issued                                      8         316       -         -         -         -          -                         -                 324                                -                          324
 Share-based payments                                        -         -         -         -         -         -          -                         76                76                                 -                          76
 Total transactions with owners                              8         316       -         -         -         -          -                         76                400                                                           400


 Profit for the period                                       -         -         -         -         -         -          -                         3,111             3,111                              (244)                      2,867
 Investment in subsidiary with non-controlling interest      -         -         -         -         28        -          -                         (469)             (441)                              441

 Other comprehensive income
 Exchange rate loss                                          -         -         -         -         631       -          -                         -                 631                                -                          631
 Total comprehensive income for the period                   -         -         -         -         659       -          -                         2,642             3,301                              197                        3,498
 Balance at                                                  1,607     15,663    1,299     28,949    (73)      1,458      (4,235)                   56,332            100,999                            1,862                      102,861

 30 Nov 2021


Consolidated cash flow statement (Unaudited)

for the six months ended 30 November 2021


                                                            6 months to                     6 months to                     Year to
                                                            30 Nov                          30 Nov                          31 May

                                                            2021                            2020                            2021
                                                            £'000                           £'000                           £'000

 Operating activities
 Cash flows from operating activities                       4,499                           1,195                           6,877
 Finance costs paid                                         (193)                           (543)                           (723)
 Income tax (paid)/repaid                                   (140)                           573                             491
 Contributions to defined benefit plan                      (141)                           (136)                           (272)

 Net cash inflow from operating activities                  4,025                           1,089                           6,373

 Investing activities
 Purchase of unlisted investments                           (2,500)                         -                               -
 Acquisition of subsidiary undertakings                     -                               -                               341
 Disposal of subsidiary undertaking, net of disposal costs  -                               -                               26,636
 Finance income                                             -                               15                              73
 Purchase of intangible assets                              (800)                           (335)                           (884)
 Purchase of property, plant and equipment                  (1,220)                         (224)                           (1,532)

 Net cash used by investing activities                      (4,520)                         (544)                           24,634

 Financing activities
 Equity dividends paid                                      -                               -                               -
 Repayments of bank loans                                   (148)                           (280)                           (4,397)
 Repayments of leases                                       (682)                           (1,596)                         (1,993)
 Proceeds from issue of ordinary shares                     324                             154                             388
 Borrowings raised                                          125                             3,448                           149

 Net cash outflow from financing activities                 (381)                           1,726                           (5,853)

 Net (decrease)/increase in cash and cash equivalents       (876)                           2,271                           25,154
 Cash and cash equivalents at beginning of period           29,736                          4,693                           4,693
 Effect of foreign exchange rate changes                    77                              (61)                            (111)

 Cash and cash equivalents at end of period                 28,937                          6,903                           29,736




Cashflows from operating activities (Unaudited)

for the six months ended 30 November 2021




                                                         6 months to                   6 months to                   Year to
                                                         30 Nov                        30 Nov                        31 May

                                                         2021                          2020                          2021
                                                         £'000                         £'000                         £'000

 Profit before income tax from continuing operations     3,119                         2,408                         5,447
 Loss before income tax from discontinuing operations    -                             (985)                         (1,732)

 Adjustments for:
 Depreciation of property, plant and equipment           1,844                         2,067                         3,461
 Amortisation of intangible assets                       277                           260                           545
 Amortisation of intangibles from business combinations  404                           629                           1,008
 Loss on disposal of property, plant and equipment       61                            8                             6
 Finance income                                          (145)                         (8)                           (73)
 Finance expense                                         137                           590                           711
 Share based payment charge                              76                            54                            133

 Changes in working capital
 (Increase)/decrease in inventories                      (979)                         (2,262)                       1,468
 Decrease/(increase) in trade and other receivables      2,756                         (5,311)                       (5,108)
 Increase/(decrease) in trade and other payables         (2,956)                       3,778                         1,457
 Decrease in provisions                                  (101)                         (1)                           (457)
 Other non-cash changes                                  6                             (32)                          11

 Cash inflow from operating activities                   4,499                         1,195                         6,877


                            6 months to                    6 months to                   Year to
                            30 Nov                         30 Nov                        31 May

                            2021                           2020                          2021
                            £'000                          £'000                         £'000

 Cash and cash equivalents

 Cash                       29,304                         7,277                         30,078

 Overdrafts                 (367)                          (374)                         (342)

                            28,937                         6,903                         29,736




Notes to the half year statement

30 November 2021


1. Basis of preparation


The Group's interim results for the six-month period ended 30 November 2021
are prepared in accordance with the Group's accounting policies which are
based on the recognition and measurement principles of International Financial
Reporting Standards ('IFRS') as adopted by the EU and effective, or expected
to be adopted and effective, at 31 May 2022. As permitted, this interim report
has been prepared in accordance with the AIM rules and not in accordance with
IAS34 'Interim financial reporting'.


These interim results do not constitute full statutory accounts within the
meaning of section 434 of the Companies Act 2006 and are unaudited. The
unaudited interim financial statements were approved by the Board of Directors
on 22 February 2022 and will shortly be available on the Group's website at


The consolidated financial statements are prepared under the historical cost
convention as modified to include the revaluation of financial instruments.
The accounting policies used in the interim financial statements are
consistent with IFRS and those which will be adopted in the preparation of the
Group's annual report and financial statements for the year ended 31 May 2022.


The statutory accounts for the year ended 31 May 2021, which were prepared
under IFRS, have been filed with the Registrar of Companies. These statutory
accounts carried an unqualified Auditor's Report and did not contain a
statement under either Section 498(2) or (3) of the Companies Act 2006.


2. Segmental analysis


                                                Energy                                          Energy               Medical                    Unallocated central items              Total

                                                EPM                                             PSRE                 MII
                                                £'000                                           £'000                £'000                      £'000                                  £'000
 6 months to 30 November 2021
 Original equipment                             6,131                                           20,493               813                        -                                      27,437
 Aftermarket                                    16,486                                          1,205                -                          -                                      17,691
 Revenue                                        22,617                                          21,698               813                        -                                      45,128
 Operating profit/(loss)                        1,435                                           2,705                (524)                      (504)                                  3,111
 Net finance costs                                                                                                                                                                     8
 Taxation                                                                                                                                                                              (252)
 Profit after tax from continuing operations                                                                                                                                           2,867

                               Energy                                       Energy                             Medical           Unallocated central items                       Total

                               EPM                                          PSRE                               MII
                               £'000                                        £'000                              £'000             £'000                                           £'000
 Year ended 31 May 2021
 Original equipment            15,427                                       35,361                             9,367             -                                               60,155
 Aftermarket                   35,956                                       2,210                              195               -                                               38,361
 Revenue                       51,383                                       37,571                             9,562             -                                               98,516
 Operating profit/(loss)       2,833                                        4,312                              (302)             (758)                                           6,085
 Net finance costs                                                                                                                                                               (638)
 Taxation                                                                                                                                                                        (383)
   Profit after tax from continuing operations                                                                                                                                   5,064

                               Energy                                       Energy                             Medical           Unallocated central items                       Total

                               EPM                                          PSRE                               MII
                               £'000                                        £'000                              £'000             £'000                                           £'000
 6 months to 30 November 2020
 Original equipment            7,528                                        17,301                             4,365             -                                               29,194
 Aftermarket                   18,469                                       1,011                              25                -                                               19,505
 Revenue                       25,997                                       18,312                             4,390             -                                               48,699
 Operating profit/(loss)       1,307                                        1,899                              99                (516)                                           2,789

 Net finance costs                                                                                                                                                               (382)
 Taxation                                                                                                                                                                        (199)
   Profit after tax from continuing operations                                                                                                                                   2,208



3. Taxation


The taxation charge is based upon the expected effective rate for the year
ended 31 May 2022.


4. Adjusted Earnings before interest, tax, depreciation and amortisation



                                                                                 6 months to                     6 months to                     Year to
                                                                                 30 Nov                          30 Nov                          31 May

                                                                                 2021                            2020                            2021
                                                                                 £'000                           £'000                           £'000

 Profit before tax from continuing operations                                    3,119                           2,407                           5,447
 Share based payment expense                                                     76                              52                              133
 Acquisition costs                                                               -                               -                               234
 Restructuring costs                                                             92                              638                             771
 Other exceptionals                                                              -                               -                               (43)
 (Gain)/loss on derivatives                                                      (139)                           70                              109
 Amortisation of intangibles from business combinations                          404                             525                             1,008

 Adjusted profit before tax                                                      3,552                           3,692                           7,659

 Finance income                                                                  (145)                           (8)                             (73)
 Finance cost                                                                    137                             390                             711
 Gain/(loss)/ on derivatives/unwinding of discounting on dilapidation provision                                                                  (109)

                                                                                 139                             (70)

 Adjusted profit before interest, tax and amortisation from business
 combinations ('EBITA')

                                                                                 3,683                           4,004                           8,188

 Depreciation                                                                    1,844                           1,593                           3,461
 Amortisation of other intangible assets                                         222                             236                             545
 Amortisation of contract assets                                                 55                              -                               310

 Adjusted Earnings before interest, tax, depreciation and amortisation

                                                                                 5,804                           5,833                           12,504


5. Finance income and costs


                                                       6 months to                   6 months to                 Year to

                                                       30 Nov                        30 Nov                      31 May

                                                       2021                          2020                        2021
                                                       £'000                         £'000                       £'000

 Finance income
 Bank balances and deposits                            6                             -                           11
 Gain on the fair value of derivative contracts        139                           -                           -
 Interest from other                                   -                             8                           62

                                                       145                           8                           73

 Finance costs
 Interest on banking facilities and lease liabilities  137                           320                         567
 Loss on the fair value of derivative contracts        -                             70                          144

                                                                137                         390                      711



6. Earnings per share


Basic earnings per share is based on the earnings attributable to ordinary
shareholders and the weighted average number of ordinary shares in issue
during the year.


For diluted earnings per share the weighted average number of ordinary shares
is adjusted to assume conversion of all dilutive potential ordinary shares,
being the CSOP and ExSOP share options.


                                                                           6 months to                                             6 months to                               Year to

                                                                           30 Nov 2021                                             30 Nov 2020                               31 May 2021

                                                                                                     No                            No                                        No

 Weighted average number of shares - basic                                 31,995,372                                              31,775,612                                31,855,908
 Share Option adjustment                                                   1,031,656                                               471,896                                   670,102

 Weighted average number of shares - diluted                               33,027,028                                              32,247,508                                32,526,010

                                                                           £'000                                                   £'000                                     £'000
 Earnings from continuing operations                                       2,867                                                   2,208                                     5,064
 Share based payments                                                      76                                                      52                                        133
 Acquisition costs                                                         -                                                       -                                         234
 Restructuring costs                                                       92                                                      638                                       771
 Other exceptionals                                                        -                                                       -                                         (43)
 (Gain)/loss on derivatives                                                (139)                                                   70                                        109
 Amortisation of intangibles from business combinations                    404                                                     525                                       1,008

 Adjusted earnings from continuing operations                              3,300                                                   3,493                                     7,276

 From continuing operations:
 Basic earnings per share                                                  9.0p                                                    6.9p                                      15.9p
 Adjusted basic earnings per share                                         10.3p                                                   11.0p                                     22.8p
 Diluted earnings per share                                                8.7p                                                    6.8p                                      15.6p
 Adjusted diluted earnings per share                                       10.0p                                                   10.8p                                     22.4p

 Earnings from discontinuing operations                                    -                                                       (115)                                     24,028
 From discontinuing operations:
 Basic loss per share                                                      -                                                       (3.0)p                                    69.5p
 Adjusted basic loss per share                                             -                                                       (0.4)p                                    75.4p
 Diluted loss per share                                                    -                                                       (2.9)p                                    68.1p
 Adjusted diluted loss per share                                           -                                                       (0.4)p                                    73.9p

 Earnings attributable to shareholders including non-controlling interest

                                                                           3,300                                                   3,378                                     31,303

 Basic earnings per share                                                  9.0p                                                    4.0p                                      85.4p
 Adjusted basic earnings per share                                         10.3p                                                   10.6p                                     98.3p
 Diluted earnings per share                                                8.7p                                                    3.9p                                      83.6p
 Adjusted diluted earnings per share                                       10.0p                                                   10.5p                                     96.2p



The Directors believe that the above adjusted earnings per share calculation
from continuing operations is the most appropriate reflection of the Group


7. Net cash/(debt) and gearing

 The gearing ratio at the year-end is as follows:       30 Nov 2021  30 Nov 2020  31 May 2021
                                                        £'000        £'000        £'000

 Cash                                                   29,304       7,277        30,078
 Loans                                                  (5,271)      (12,604)     (5,186)
 Lease liability - finance leases under IAS17           (968)        (2,104)      (1,210)
 Lease liability - under IFRS 16                        (2,743)      (8,057)      (3,065)
 Overdrafts                                             (367)        (374)        (342)
 Net cash                                               19,955       (15,862)     20,275

 Equity                                                 102,861      70,770       98,963
 Net cash/(debt) to equity ratio                        19.4%        (22.4)%      20.5%
 Net cash/(debt) to equity ratio excluding IFRS16 debt  22.1%        (11.0)%      23.6%


8. Events after the balance sheet date

On 20 January 2021, the Group purchased 150,000 shares in Adaptix Limited, for
a total consideration of £1.5m. This increases the Groups shareholding to
400,000 Adaptix shares, representing 11.9% of the current issued share


On 1 December 2021, HT Fluid Handling purchased 100% of Transkem Ltd for
£1.2m (including £0.4m deferred consideration, based on the future
profitability of the business in the 2yrs to 30 November 2023). Draft Net
Assets were £0.8m, including £0.2m freehold property and £0.3m cash.
Transkem operates in the complementary fluid mixer sector.


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