Science Group (SAG) H1 2024 earnings summary

Executive summary

• Record adjusted operating profit of £11.0m, up from £10.4m year-over-year, with AOP margin at 20.5% despite revenue decline to £53.7m from £56.1m.

• Adjusted basic EPS rose to 18.1p (H1 2023: 16.6p); strong cash generation with £10.7m from operations.

• Robust balance sheet with £38.8m group cash and net funds of £26.4m, both significantly higher than prior year.

• CMS2 turnaround delivered substantial growth in revenue and profitability, now a key asset in the Defence sector.

• Increased 2024 share buyback programme up to £5.0m, reflecting confidence in financial position.

Financial highlights

• Group cash increased to £38.8m from £29.2m year-over-year; net funds rose to £26.4m from £15.7m.

• Adjusted basic EPS improved to 18.1p from 16.6p year-over-year.

• Cash generated from operations was £10.7m, up from £7.2m year-over-year.

• Operating profit was £7.7m (H1 2023: £6.4m); profit for the period was £5.9m, up from £5.4m.

• Share buyback program for 2024 increased up to £5.0m.

Outlook and guidance

• H1 performance in line with Board expectations, with continued focus on operational effectiveness and integration.

• Board anticipates H2 2024 performance in the Consultancy Division to be broadly in line with H1.

• CMS2 and Frontier positioned for future growth, with ongoing investment in R&D and operational improvements.

• CMS2 has good demand visibility and is investing in service/support contracts and innovation.

• Strong balance sheet and undrawn debt facilities support ongoing corporate opportunities and increased share buybacks.