29th Aug 2014 08:00
LONDON (Alliance News) - Shares in Exova Group PLC plunged in early trade on Friday after the company posted a much wider pretax loss in the first half, as costs related to its initial public offering combined with weak performance in some markets.
However, the company said its outlook for the medium term remains positive and said its performance in the first half had been satisfactory.
The FTSE 250-listed testing and advisory services group said its pretax loss in the six months to June 30 hit GBP38.1 million, nearly four times the GBP10.3 million loss reported a year earlier. Revenue in the period was down to GBP134.7 million, against GBP138.4 million last year.
The news of the wider loss sent shares in the group down 9.8% in morning trade Friday to 194.00 pence, making it comfortably the biggest faller in the FTSE 350. Earlier, the stock set a new 52-week low of 185.23p.
Exova's results were hit in part by a rise in financing costs in the period, much of which was related to its IPO. Total financing costs in the period were GBP40.2 million, up from GBP25.8 million a year earlier, with GBP13.3 million of those costs related to its IPO.
Exova also was hit by a drop in revenue from its Americas division, with revenue falling 11% to GBP46.7 million from GBP52.4 million a year earlier. The company said the fall was partly down to the impact of some poor weather in the region in the first half and lower levels of coring activities in Western Canada.
In addition, it said its results for the segment last year had been boosted by unexpectedly high sales from one of its clients, which has not been repeated in the first half of this year.
Revenue from its European arm was up 3.8% to GBP71.7 million in the first half from GBP69.1 million last year, boosted by growth in its Health Sciences and Product businesses. The results were offset somewhat, however, by subdued demand in the group's Aerospace segment.
In its Rest of World operations, revenue was down 3.6% to GBP16.3 million from GBP16.9 million a year earlier.
Exova said it expects underlying organic growth in the full year to be in line with the first half of the year and said it remains confident on its medium-term outlook.
By Sam Unsted; [email protected]; @SamUAtAlliance
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