TIDMEXO
RNS Number : 0353G
Exova Group PLC
24 May 2017
24 May 2017
Exova Group plc
Trading Update
On track to deliver the Group's 2017 expectations
Exova Group plc ("Exova"), a leading international provider of
technically demanding testing, certification and advisory services,
today releases a Trading Update for the period since 31 December
2016 to date. Where stated, the financial results are for the
period from 1 January to 30 April 2017 compared with the
corresponding period in 2016.
Group performance for the four months to 30 April 2017
-- Total revenue up +2.0% at actual rates; (6.2)% at constant currency
o (1.6)% organic growth at constant currency (+1.2% excluding
Oil, Gas & Industrials)
o +3.7% growth from acquisitions, (4.6)% net of disposals
o Foreign exchange tailwind of 8.2% arising from our global
footprint
-- M&A pipeline continues to be strong and recent acquisitions performing well
Divisional performance in the period from 1 January 2017 to
date
In Industries, we delivered strong organic revenue growth
performance in Aerospace. In addition, we have also seen continued
progress with other industrial clients where we delivered positive
organic revenue growth. While Oil & Gas remains challenging
overall with limited future visibility, our Western Canada
operation delivered positive organic revenue growth in the
period.
In Products, our Transportation business performed better than
the Board expected despite contracting overall as a result of lower
levels of engines testing. In Fire, Building Products &
Certification we saw solid organic revenue growth and we cemented
our position in the Australian fire testing and engineering market
with the acquisition of Defire, a Sydney-based fire safety
engineering consultancy business. Our Calibration business
contracted due principally to lower volumes in Sweden.
In Infrastructure, Health & Environment, we saw solid
organic revenue growth across Infrastructure & Environment,
resulting from good growth in Europe and Singapore, partially
offset by lower levels of activity in the Middle East. The phasing
of projects in the Middle East poses some risk to short term
performance in the sector although the overall pipeline of work in
the region remains encouraging. In US Health Sciences, we
strengthened our position in the market further with the
acquisition of SL Pharma Labs Inc. in Delaware.
Outlook
As announced at the time of the preliminary results for the year
ended 31 December 2016, the Board continues to expect modest
organic revenue growth at constant currency in 2017 and recent cost
actions will offset general pressure on group margins. The Company
announced a recommended offer from Element Materials Technology
Group Limited on 19 April 2017 with a shareholder vote to approve
the offer expected to occur on 9 June 2017.
Ian El-Mokadem, Chief Executive Officer, commented:
"The Group has generally performed as expected in the first four
months of 2017. We continue to generate organic growth outside of
our Oil, Gas & Industrials sector, albeit to more modest levels
than in 2016 as we expected. We continue to make good progress with
acquisitions, with an encouraging pipeline which should continue to
contribute to overall revenue growth."
Confirmation by the Exova Directors
On 28 February 2017, Exova announced its results for the year
ended 31 December 2016. As part of that announcement the following
statement (the "Statement") regarding the outlook for Exova was
made:
"The Board expects modest organic revenue growth at constant
currency in 2017. This will be driven by Exova's diversified
exposure and good growth in most sectors, moderated by continuing
pressure in oil & gas, and a lower point in the project cycle
of our engines testing business. Organic growth is expected to be
weighted towards the second-half, partly as a result of more
favourable like-for-like comparisons. Our acquisitions programme
should continue to contribute to overall revenue growth. We expect
that recent actions we have taken to reduce cost will offset
general pressure on group margins in the current financial
year."
The Statement is again confirmed in the section titled "Outlook"
of this Trading Update.
The Statement was originally published before commencement of
the offer period triggered by the announcement by Exova on 26 March
2017 of discussions with possible offerors which could lead to an
offer being made for the entire issued and to be issued share
capital of Exova, and was repeated and confirmed in the
announcement by Element and Exova of a recommended cash acquisition
of Exova by Element on 19 April 2017 and the related scheme
circular published on 12 May 2017. Accordingly, the requirements of
Rule 28.1(c)(i) of the City Code apply in relation to the
Statement.
The Exova Directors confirm that the Statement remains valid and
confirm that the Statement has been properly compiled on the basis
of the assumptions stated below and that the basis of accounting
used is consistent with Exova's accounting policies.
Assumptions
The Statement was prepared on the basis of the following
assumptions, any of which could turn out to be incorrect and
therefore affect the validity of the Statement:
Factors within the influence and control of the Exova
Directors
-- There is no material change in the operational strategy of
Exova from the date of this document.
-- There will be no acquisitions or disposals beyond Exova's
existing acquisition strategy which will have a material impact on
Exova's results.
-- There are no material strategic investments over and above those currently planned.
Factors outside the influence or control of the Exova
Directors
-- There will be no material macroeconomic change in the
principal markets and regions in which Exova operates.
-- There will be no material adverse events which will have a
significant impact on Exova's financial results.
-- There will be no changes in interest rates, bases of
taxation, regulatory environment or legislation that have a
material impact on Exova, including in relation to operations or
accounting policies.
-- There will be no material changes in customer demand or the
competitive environment in which Exova operates.
-- There will be no material changes in the competitive
environment for acquisitions within the Testing, Inspection and
Certification sector that will impact Exova's ability to continue
with its existing acquisition strategy.
-- There will be no business disruptions that materially affect Exova or its key customers.
-- There will be no significant and sustained weakening or
strengthening of the pound sterling against the currencies of the
major territories in which Exova operates.
Contacts
Peter Ogden / Andy Jones - Powerscourt Group
Tel. Direct +44 (0)20 7549 0997 / +44 (0)7793 858 211
exova@powerscourt-group.com
Exova
Exova is one of the world's leading laboratory-based testing
groups, trusted by organisations to test and advise on the safety,
quality and performance of their products and operations.
Headquartered in Edinburgh, UK, Exova operates 138 laboratories and
offices in 33 countries and employs more than 4,200 people
throughout Europe, the Americas, the Middle East, Asia/Asia Pacific
and Africa.
Exova's capabilities help to extend asset life, bring
predictability to applications, and shorten the time to market for
customers' products, processes and materials. With over 90 years'
experience, Exova specialises in testing across a number of key
sectors ranging from Aerospace to Fire & Building Products; Oil
& Gas and Industrials; Infrastructure & Environment;
Transportation; and Health Sciences.
This Trading Update contains forward-looking statements that
involve substantial risks and uncertainties and actual results and
developments may differ materially from those expressed or implied
by these statements by a variety of factors. These forward-looking
statements speak only as at the date of this Trading Update. In
addition, all projections, valuations and statistical analyses
provided in this document may be based on unaudited pro-forma
financial information, subjective assessments and assumptions. They
may use alternative methodologies that produce different results
and should not be relied upon as an accurate prediction of future
performance.
Exova Group plc is registered in England (registration number
08907086). Its legal entity identifier ("LEI") number is
213800BFE317FGSYMZ19.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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