Join our community of smart investors

Exova overcomes weak energy markets with acquisitions and diversity

The testing and advisory group posted higher like-for-like sales in four of its five divisions

Torpid trading in energy and industrial markets put Exova (EXO) to the test in the first half of 2016. But gains in other markets and a string of acquisitions pushed the testing and advisory services group's operating profits before one-offs up 9 per cent to £23.4m.

IC TIP: Hold at 199p

Exova, which operates 138 laboratories and offices across 33 countries, stomached a 16 per cent fall in organic, constant-currency sales in its oil, gas and industrials segment. The main culprit was the depressed oil price, which resulted in lower project spending in Europe, fewer clients and pricing pressure in the Americas and less activity in Asia. But comparable revenues rose by at least 4 per cent across Exova's other divisions, reflecting strong demand for aerospace testing in Europe and the Americas and road and rail investments in Saudi Arabia and Qatar.

To continue reading...
  • Read 3 articles for free each month
  • Educational articles and topical investment guides
  • In-depth podcast episodes by our writers and industry professionals
  • Interactive live webinars on investment themes that matter
Have an account? Sign in