Interim Results

For immediate release 30 June 2025

Porvair plc

Interim results for the six months ended 31 May 2025

Porvair plc ("Porvair" or the "Group"), the specialist filtration, laboratory and environmental technology group, announces its interim results for the six months ended 31 May 2025 ("H1 2025" or the "period").

Highlights:

· Revenue up 3% to £97.7 million (2024: £94.6 million), 5% higher on a constant currency basis*.

· Adjusted operating profit* 1% higher at £12.6 million (2024: £12.5 million).

· Operating profit 3% higher at £11.9 million (2024: £11.6 million). 

· Adjusted profit before tax* 4% higher at £12.0 million (2024: £11.5 million).

· Profit before tax 7% higher at £11.3 million (2024: £10.6 million).

· Adjusted basic earnings per share* 3% higher at 20.0 pence (2024: 19.5 pence).

· Basic earnings per share 5% higher at 19.0 pence (2024: 18.1 pence). 

· Closing cash at £17.1 million (31 May 2024: £4.1 million; 30 November 2024: £13.7 million) after investing £2.3 million (2024: £2.5 million) in capital expenditure.

· Interim dividend increased by 0.1 pence per share to 2.2 pence per share (2024: 2.1 pence per share).

Commenting on the performance and outlook, Hooman Caman Javvi, Chief Executive, said:

"Reporting on my first set of results, the Group has performed in line with expectations during the first six months of 2025. Trading has been mixed across our end markets, with strength in certain industrial businesses and laboratory instruments, offsetting softness in aerospace and foundry together with foreign exchange headwinds. Currently, the trading outlook for the second half of the year remains positive. We continue to monitor the near-term macro-economic uncertainty and tariff environment, noting that the Group's manufacturing footprint mainly serves local customers.

Since joining the Group, I have visited our locations and met with our highly talented team across the business. I have been encouraged by our technical capabilities and the potential of the company, as it is facing end-markets with long-term growth potential.

The Group's fundamental demand drivers have not changed and Porvair remains well positioned to take advantage of tightening environmental regulation; the growth of analytical science; the need for clean water; the development of carbon-efficient transportation; the replacement of plastic and steel by aluminium; and the drive for manufacturing process quality and efficiency. It is these trends that have driven the Group's consistent longer-term trading record."

*See notes 1, 2 and 3 for definitions and reconciliations.

For further information please contact:

An analyst briefing will take place at 9:30 a.m. on Monday 30 June 2025 at Burson Buchanan, please contact Burson Buchanan for details. An audiocast of the meeting and the presentation will subsequently be made available at www.porvair.com.

Operating review

The Group achieved 3% revenue growth (5% constant currency) in H1 2025. Adjusted operating profit was 1% ahead of the prior period, impacted by product mix and foreign exchange headwinds. Cash generation was strong, leaving net cash of £17.1 million at 31 May 2025, having started the year with £13.7 million (£4.1 million in prior period).

Trading has been mixed across our end markets. We have experienced stronger demand in the petrochemical markets and laboratory instruments, while the auto, truck and agriculture markets were down. There has been a slower start in aerospace, however we have reassuring order visibility for the second half of the year. The benefit from the European Filter Corporation (EFC) acquisition in the prior year continues to come through. Inconsistency in trading patterns across the Group is not unusual. We serve a range of markets in different parts of the world and trading can be affected by both local and global events. We continue to monitor the current macro-economic uncertainty and tariff environment, noting that the Group's manufacturing footprint mainly serves local customers.

Despite this natural variation, Porvair benefits from underlying growth trends that have not changed: tightening environmental regulation; the growth of analytical science; the need for clean water; the development of carbon-efficient transportation; the replacement of plastic and steel by aluminium; and the drive for manufacturing process quality and efficiency. Our decentralised management structure is helpful in volatile trading conditions, enabling key commercial decisions to be made closer to customers and suppliers. The benefit of the Group's diverse operating spread is shown in the relatively consistent long-term track record, despite inconsistent demand across sectors.

Since joining the Group, I have visited our locations and met with our highly talented team across the business. I have been encouraged by our technical capabilities and the potential of the company, as it is facing end-markets with long-term growth potential. In order to enhance our execution and continue to build on strengths, we have formed an Executive Committee responsible for the management of the Group, consisting of the Executive Directors and key members of the senior leadership team, and have added a central resource to support M&A activities.

Financial summary

*See notes 1, 2 and 3 for definitions and reconciliations.

Strategy and purpose

Porvair's strategy and purpose have remained consistent for over 20 years, a period that now encompasses two recessions. The Group's record for growth, cash generation and investment is:

This longer-term growth record gives the Board confidence in the Group's capabilities and is the basis for capital allocation and planning decisions.

Strategic statement and business model

Porvair's strategic purpose is the development of specialist filtration, laboratory and environmental technology businesses for the benefit of all stakeholders. Principal measures of success include consistent earnings growth and selected ESG measures. The Group publishes a full ESG report at the time of the annual financial results.

The Group is positioned to benefit from global trends as outlined above.

Porvair's businesses have certain key characteristics in common:

· specialist design, engineering or commercial skills are required;

· product use and replacement is mandated by regulation, quality accreditation or a maintenance cycle; and

· products are typically designed into a system that will have a long life-cycle and must perform to a given specification.

Orders are won by offering the best technical solutions or commercial service at an acceptable cost. Technical expertise is necessary in all markets served. New products are often adaptations of existing designs with attributes validated in our own test and measurement laboratories. Experience in specific markets and applications is valuable in building customer confidence. Domain knowledge is important, as is deciding where to direct resources.

This leads the Group to:

· focus on markets with long-term growth potential;

· look for applications where product use is mandated and replacement demand is regular;

· make new product development a core business activity;

· establish geographic presence where end-markets require; and

· invest in both organic and acquired growth.

Therefore:

· we focus on three operating segments: Aerospace & Industrial; Laboratory; and Metal Melt Quality. All have clear long-term growth drivers;

· our products typically reduce emissions or protect complex downstream systems and, as a result, are replaced regularly. A high proportion of our annual revenue is from repeat orders;

· through a focus on new product development, we aim to generate growth rates in excess of the underlying market. Where possible, we build intellectual property around our product developments;

· our geographic presence follows the markets we serve. In the last twelve months: 43% of revenue was in the Americas; 17% in Asia; 27% in Continental Europe; 11% in the UK; and 2% in Africa. The Group has plants in the US, UK, Belgium, Germany, Hungary, the Netherlands, India and China. In the last twelve months: 44% of revenue was manufactured in the US; 27% in the UK; 25% in Continental Europe and 4% in Asia; and

· we aim to meet dividend and investment needs from free cash flow and modest borrowing facilities. In recent years we have expanded manufacturing capacity in the US, UK, Germany, Hungary and China, and made several acquisitions. All investments are subject to a hurdle rate analysis based on strategic and financial priorities.

Environmental, Social and Governance ("ESG")

The Board understands that responsible business development is essential for creating long-term value for stakeholders. Most of the products made by Porvair are used for the benefit of the environment. Our water analysis equipment measures contamination levels in water. Industrial filters are typically needed to reduce emissions or improve efficiency. Aerospace filters improve safety and reliability. Nuclear filters confine fissile materials. Metal Melt Quality filters reduce waste and help improve the strength to weight ratio of metal components. 

A full ESG report was published in February 2025 and is available on the Porvair plc website, setting out:

· Porvair's ESG management framework and goals;

· how energy transition and climate change might affect markets served by the Group, and how these trends affect our long-term planning framework;

· ESG metrics and results; and

· how the Group acted for the benefit of its stakeholders in 2024.

Divisional review

Aerospace & Industrial

*See notes 1 and 2 for definitions and reconciliations.

The Aerospace & Industrial division designs and manufactures a wide range of specialist filtration products, demand for which is driven by customers seeking better engineered, cleaner, safer or more efficient operations. Differentiation is achieved through design engineering; the development of intellectual property; quality accreditations; and customer service.

Revenue in the period increased by 10%. The demand for the petrochemical market increased by 23% and the contribution from EFC, acquired in the prior year, helped to offset the slower demand in US industrial consumables. Aerospace revenue was 8% lower, with reassuring order visibility for the second half of the year. Adjusted operating profit was impacted by product mix and foreign exchange headwinds.

Laboratory

*See notes 1 and 2 for definitions and reconciliations.

The Laboratory division has two operating businesses: Porvair Sciences (including Finneran, Kbiosystems and Ratiolab) and Seal Analytical.

· Porvair Sciences manufactures laboratory filters, small instruments and associated consumables, for which demand is driven by sample preparation in analytical laboratories. Differentiation is achieved through proprietary manufacturing capabilities; control of filtration media; and customer service.

· Seal Analytical supplies instruments and consumables to environmental laboratories, for which demand is driven by water quality regulations. Differentiation is achieved through consistent new product development focused on improving detection limits, and improving laboratory automation.

Revenue in the period was up 1%, driven by instrument sales for analytical and environmental laboratories, with steady demand for consumables. Several new product developments in Seal Analytical, Porvair Sciences and Kbiosystems were launched in the year, some of which have already gained good traction and early interest from the market, which should be good for the full year and beyond.

Metal Melt Quality

*See notes 1 and 2 for definitions and reconciliations.

The Metal Melt Quality division manufactures filters for molten aluminium, ductile iron and nickel-cobalt alloys. It has a well-differentiated product range based on patented products and extensive experience in melt quality assessment.

Revenue in the period fell by 6%. Adjusted operating profit reduced by 6%, with lower industrial demand within the auto, truck and agriculture market, which is a smaller part of our Metal Melt Quality business. This was partially offset with increased aluminium cast shop demand and strong demand for superalloys. Progress was made in the period with regards to insurance recovery for damage caused by Hurricane Helene to operations in Hendersonville, North Carolina, in the prior year. 

The £5.5 million investment to update and expand the Group's aluminium cast house production capabilities in Hendersonville is progressing as per plan, which will ramp up in the second half and complete in the first half of 2026. These assets require replacement on a 20-25 year cycle and will increase capacity, lower unit costs and improve carbon intensity. This investment will position the Group well to benefit from the continuing increased aluminium demand due to the replacement of plastic and steel by aluminium with its recyclability, the energy transition and its strength to weight benefits, making aluminium the perfect choice for many applications.

Alternative performance measures - Group profit

The Group presents alternative performance measures to enable a better understanding of its trading performance (see note 1). 

Adjusted operating profit and adjusted profit before tax exclude items that are material and where treatment as an adjusting item provides a more consistent assessment of the Group's trading performance. Adjusted profit excludes £0.6 million (2024: £0.9 million) for the amortisation of acquired intangible assets (see note 1).

Finance costs

Net finance costs comprise interest on borrowings; lease liabilities; and the Group's retirement benefit obligations; together with the cost of unwinding discounts on provisions and other payables. The Group also incurs undrawn commitment fees on available banking facilities. Net finance costs of £0.6 million (2024: £1.0 million) decreased in the period, following the repayment of borrowings in the second half of the prior year. 

Tax

The total Group tax charge was £2.5 million (2024: £2.3 million), including the tax effect of the adjusting items set out in note 1. The adjusted tax charge was £2.6 million (2024: £2.5 million), with the effective rate of income tax on adjusted profit before tax at 22% (2024: 22%).

Earnings per share ("EPS") and dividends

Basic EPS for the period was 19.0 pence (2024: 18.1 pence) and adjusted EPS 20.0 pence (2024: 19.5 pence). The Board has declared an interim dividend of 2.2 pence (2024: 2.1 pence) per share.

Investment

In the last five years, the Group has invested £51.6 million in capital expenditure and acquisitions. During the period, the Group invested £2.3 million on capital expenditure (2024: £2.5 million). 

Cash flow, cash and net debt

Cash generated from operations in the six months to 31 May 2025 was £10.2 million (2024: £7.1 million). The Group typically sees an increase in working capital in the first half of the year. Working capital increased by £3.3 million (2024: £7.1 million). 

Cash and cash equivalents at 31 May 2025 were £17.1 million (31 May 2024: £4.1 million net of borrowings; 30 November 2024: £13.7 million), comprising cash of £18.8 million and bank overdrafts of £1.7 million. Cash and cash equivalents held in the UK are subject to a Composite Account System, which is a banking offset arrangement that allows the set-off of overdraft balances with cash for interest calculation purposes. Lease liabilities were £14.2 million (31 May 2024: £18.7 million; 30 November 2024: £17.5 million). 

Return on capital employed

The Group's return on capital employed was 14% (2024: 14%). Excluding the impact of goodwill and retirement benefit obligations, the return on operating capital employed was 30% (2024: 31%).

Outlook

The Group has performed in line with expectations during the first six months of 2025. Trading has been mixed across our end markets, with strength in certain industrial businesses and laboratory instruments, offsetting softness in aerospace and foundry together with foreign exchange headwinds. Currently, the trading outlook for the second half of the year remains positive. We continue to monitor the near-term macro-economic uncertainty and tariff environment, noting that the Group's manufacturing footprint mainly serves local customers.

Since joining the Group, I have visited our locations and met with our highly talented team across the business. I have been encouraged by our technical capabilities and the potential of the company, as it is facing end-markets with long-term growth potential.

The Group's fundamental demand drivers have not changed and Porvair remains well positioned to take advantage of tightening environmental regulation; the growth of analytical science; the need for clean water; the development of carbon-efficient transportation; the replacement of plastic and steel by aluminium; and the drive for manufacturing process quality and efficiency. It is these trends that have driven the Group's consistent longer-term trading record.

Hooman Caman Javvi

Group Chief Executive

27 June 2025

Related parties

Other than the remuneration of key management personnel, there were no related party transactions in the six months ended 31 May 2025 (2024: none).

Principal risks

Each division considers strategic, operational and financial risks and identifies actions to mitigate those risks. These risk profiles are reviewed by the Board and updated at least annually. Further details of the Group's risk profile analysis can be found in the Strategic Report section of the Annual Report & Accounts for the year ended 30 November 2024. There have been no significant changes since the year end.

Certain elements of the Group's order position can change quickly in the face of changing economic circumstances. The Metal Melt Quality division, Laboratory division and general industrial filtration within the Aerospace & Industrial division all have relatively short lead times and order cycles and, therefore, revenue is subject to fluctuations which could have a material effect on the Group's results for the balance of 2025. 

Forward-looking statements

Certain statements in this interim financial information are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Condensed consolidated income statement

For the six months ended 31 May

Condensed consolidated statement of comprehensive income

For the six months ended 31 May

The accompanying notes are an integral part of this interim financial information. 

Condensed consolidated balance sheet

As at 31 May

The interim financial information was approved by the Board of Directors on 27 June 2025 and was signed on its behalf by:

Hooman Caman Javvi James Mills

Group Chief Executive Group Finance Director

The accompanying notes are an integral part of this interim financial information.

Condensed consolidated cash flow statement

For the six months ended 31 May

Reconciliation of net cash flow to movement in net cash/(debt)

For the six months ended 31 May

The accompanying notes are an integral part of this interim financial information.

Condensed consolidated statement of changes in equity

For the six months ended 31 May (unaudited)

The accompanying notes are an integral part of this interim financial information.

Notes

1. Alternative performance measures

Alternative performance measures are used by the Directors and management to monitor business performance internally and exclude certain cash and non-cash items which they believe are not reflective of the normal course of business of the Group. The Directors believe that disclosing such non-IFRS measures enables a reader to isolate and evaluate the impact of such items on results and allows for a fuller understanding of performance from period to period. Alternative performance measures may not be directly comparable with other similarly titled measures used by other companies.

Alternative revenue measures (unaudited)

Revenue at constant currency is derived from translating overseas subsidiaries results at budgeted fixed exchange rates. In 2025 and 2024, the budgeted rates used were US$1.40:£1 and €1.20:£1, compared with reported rates of US$1.29:£1 (2024: US$1.27:£1) and €1.20:£1 (2024: €1.17:£1).

Underlying revenue is revenue at constant currency adjusted for the impact of acquisitions made in the current period and prior year. The acquisition line above relates to the revenue from EFC, acquired in December 2023.

A reconciliation of the Group's adjusted performance measures to the reported IFRS measures is presented below:

An analysis of adjusting items is given below:

Adjusted operating profit excludes the amortisation of intangible assets arising on acquisition of businesses of £0.6 million (2024: £0.9 million).

2. Segmental information

The chief operating decision maker has been identified as the Board of Directors. The Board of Directors has instructed the Group's internal reporting to be based around differences in products and services, in order to assess performance and allocate resources. The key profit measure used to assess the performance of each reportable segment is adjusted operating profit/(loss). Management has determined the operating segments based on this reporting.

As at 31 May 2025, the Group is organised on a worldwide basis into three operating segments:

1) Aerospace & Industrial - principally serving the aviation, and energy and industrial markets;

2) Laboratory - principally serving the bioscience and environmental laboratory instrument and consumables market; and

3) Metal Melt Quality - principally serving the global aluminium, iron foundry and superalloys markets.

Other Group operations' costs, assets and liabilities are included in the "Central" division. Central costs mainly comprise Group corporate costs, including new business development costs, some research and development costs and general financial costs. Central assets and liabilities mainly comprise Group retirement benefit obligations, tax assets and liabilities, cash and borrowings.

The segment results for the period ended 31 May 2025 are as follows:

The segment results for the period ended 31 May 2024 are as follows:

The segment assets and liabilities at 31 May 2025 are as follows:

The segment assets and liabilities at 31 May 2024 are as follows:

The segment assets and liabilities at 30 November 2024 are as follows:

Geographical analysis