Porvair (PRV) H1 2024 earnings summary

Executive summary

• Revenue increased by 5% year-over-year to £94.6m, with 8% growth at constant currency, driven by acquisitions and strong aerospace and petrochemical demand, offsetting industrial and laboratory consumables weakness and FX headwinds.

• Adjusted operating profit rose 2% to £12.5m, while adjusted profit before tax fell 3% to £11.5m; adjusted EPS declined by 4% to 19.5p, reflecting margin pressures and market variability.

• Net cash at period end was £4.1m after £12.7m invested in acquisitions and capex, notably the EFC acquisition.

• Interim dividend increased by 5% to 2.1p per share, maintaining a progressive dividend policy.

• Strategy remains unchanged, with a strong annuity model, high customer retention, and resilience supported by recurring revenues.

Financial highlights

• Group revenue reached £94.6m, up 5% year-over-year; at constant currency, growth was 8%.

• Adjusted profit before tax was £11.5m (down 3%); adjusted EPS was 19.5p (down 4%).

• Operating profit rose 2% to £12.5m; operating margin above 13%.

• Net cash at period end was £4.1m, down from £19.7m last year, mainly due to the EFC acquisition.

• Return on capital employed was 14% (down from 16%).

Outlook and guidance

• Management expects a stronger second half in 2024, with order books improving and lead times normalizing.

• Aerospace and petrochemical demand expected to remain robust into 2025, with large orders shipping at year-end and into early 2025.

• Signs of recovery in consumables and laboratory orders in recent weeks.

• Ratiolab integration progressing, expected to contribute positively in H2 as integration costs fall away.

• Long-term demand drivers include environmental regulation, analytical science, clean water, and efficient transportation.