Exova (EXO) revealed results in line with guidance that demonstrated the value of buying in growth. Eight acquisitions were completed in the year through to December, effectively pushing up revenue by 8.2 per cent at constant currencies. Organic top-line growth was subdued by comparison, and underlying profit margins were constricted, but it was a reasonably pleasing result bearing in mind the continuing difficulties in the group's oil and gas markets.
Last year's acquisitions, which form part of a wider diversification programme, have expanded the range of Exova's testing services, with particularly encouraging outcomes for the product and certification and Middle East segments. In May, the group completed its largest acquisition to date with the £22m deal to capture BM TRADA. Planned synergies have been achieved well ahead of target, leading to a significant strengthening of Exova's fire and certification capability.
You really need to pick your way through headline comparisons with 2014, as the group incurred £13.3m in costs relating to its initial public offering. Exova took on £4.9m in restructuring costs in 2015 as it restructured laboratories and departments, more than doubling 2014's total. Meanwhile, finance costs dropped to £6.3m from £43.6m.
Broker Investec is forecasting adjusted full-year pre-tax profit of £39.9m, leading to EPS of 11.7p, against £40.4m and 12.2p in 2015.
| EXOVA (EXO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 147p | MARKET VALUE: | £368m | |
| TOUCH: | 145.25-150 | 12-MONTH HIGH: | 199p | LOW: 123p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 113p* | NET DEBT: | 53% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 242 | -46.3 | na | nil |
| 2012 | 254 | -24.2 | na | nil |
| 2013 | 279 | -25.6 | -810 | nil |
| 2014 | 275 | -23.7 | -16.6 | 2.0 |
| 2015 | 297 | 23.2 | 6.8 | 3.2 |
| % change | +8 | - | - | +60 |
Ex-div: 26 May Payment: 10 Jun *Includes intangible assets of £373m, or 149p a share | ||||
