Porvair overcomes industrial disruption

The filtration specialist, which also achieved growth in its laboratory and metal melt quality businesses, delivered several large orders over the first half, which included spare parts for gasification. Porvair does not expect regular orders for more spares, according to group financial director Chris Tyler, nor does it expect a repeat of the nuclear clean-up work it did in the US. However, the division performed well as a whole and overcame a modest impact on its microelectronics work from the US-China tariff dispute – “set against some relatively weak comparatives in the prior year”, Mr Tyler admitted, when aerospace and industrial revenues grew only 6 per cent. Laboratory revenues were up 4 per cent, with seal analytical sales down 1 per cent, again owing to the effect of tariffs on Chinese demand, along with the switch to Porvair’s new AA500 flow analyser, which had the effect of lowering production.

Porvair’s working capital rose by £7.5m – this usually increases in the first half, Porvair’s group financial director says, partly because of the routine timing of several annual payments, including insurance and pension deficit contributions. Disproportionately strong May revenues and around £1m of Brexit-related stock on the balance sheet also played their part. Provisions rose £9.9m, compared with a comparable first-half fall of £363,000. “We have some very cautious provisioning on the large gasification contracts that have been going through the P&L and balance sheet over the past five years or so,” Mr Tyler says.

Bloomberg consensus gives adjusted November 2019 EPS of 24.8p, rising to 26p in FY2020.