Science Group (SAG) Trading update summary

Trading performance and outlook

• On track for a resilient 2026 performance, in line with Board expectations despite geopolitical and UK defence sector challenges.

• Revenue expected to be lower than prior year due to reductions in low margin Defence activities, offset by improved margins.

• Sagentia Services Division remains well positioned, though UK Defence sector faces delays from deferred investment plans.

• CMS2 business less affected by defence budget uncertainty and progressing contracts that could provide growth visibility into the 2030s.

• Frontier DAB+/SmartRadio revenue stable; new Auria product shipments began in April, with cautious outlook due to memory chip cost inflation and weak consumer demand.

Capital allocation and shareholder returns

• Over £24 million returned to shareholders since the 2025 AGM through buybacks and dividends.

• Group cash at £68.5 million and net funds at £57.2 million as of 30 April 2026; revolving credit facility remains undrawn.

• 3,938,596 shares repurchased in the past year, reducing voting share capital to below levels from 15 years ago.

• Board plans to continue buybacks and is seeking approval to increase the buyback limit for added flexibility.

• Considering all capital allocation options, including potentially increasing capital returns to shareholders if no major investments occur.

Strategic positioning and future plans

• Strong balance sheet supports operating businesses and enables pursuit of M&A or investment opportunities.

• Relative valuation as a London-listed company is seen as a constraint on corporate ambitions.

• Board remains focused on enhancing shareholder value through disciplined capital allocation.