14th May 2015 07:00
14 May 2015
Exova Group plc
Trading Update
Organic growth on track complemented by good progress with acquisitions
Exova Group plc ("Exova"), a leading international provider of technically demanding testing and advisory services, today releases a Trading Update for the period since 31 December 2014 to date. Where stated, financial results are for the period from 1 January to 30 April 2015 ("the period"). All comparative comments in this statement reflect the comparisons with the corresponding period during 2014.
Group performance
· Total revenue growth of 4.7% at constant currency including acquisitions and net of disposals:
o Organic revenue growth of 3.4%
o Growth from acquisitions of 2.3%
o Impact of disposals of (1.0)%
· Total revenue at actual exchange rates grew by 3.8%
· Acquisition of BM TRADA Group Limited extends our service offering and global reach
· Outlook for our existing businesses in 2015 remains unchanged and we will now exceed acquisitions guidance
Regional performance
In Europe, we have seen good organic growth in our Aerospace, Health Sciences and Product clusters. As anticipated, our Aerospace cluster has returned to growth following the customer delays we experienced in 2014 and our Health Sciences business is continuing to benefit from contracts won in 2014 and a generally positive trading environment. As expected, the impact of low oil prices has led to some contraction in our Oil & Gas and Industrials cluster, however demand for our long cycle, capex-driven testing services remains healthy.
Organic revenues in the Americas were broadly flat as we saw an expected return to growth in Aerospace, a trend we believe will continue to improve during the year. We delivered modest growth in Oil & Gas and Industrials as a result of sustained demand for our long cycle, capex-driven testing services in the US and a slightly better than expected performance in Western Canada. We experienced a modest contraction in Health Sciences while levels of activity in the Product cluster remained lower.
In Rest of World, we have seen strong growth as a result of good contract wins in all clusters. The outlook for the region remains positive as we continue to see a good pipeline of future opportunities.
Acquisitions
On 13 May 2015 we completed the acquisition of BM TRADA Group Limited ("BM TRADA") for a consideration of approximately £22 million including the assumption of pension liabilities and subject to normal post-closing adjustments. BM TRADA is a provider of certification and building products testing services employing 340 people across 16 countries with annual turnover in excess of £20 million and pro-forma EBITA margin of about 10%. This acquisition provides Exova with a new platform for growth in systems certification. It also extends our global reach into 8 new countries while expanding our range of building products testing and certification services. BM TRADA will deliver revenues in all three of our geographic regions and will become part of our Product cluster which will be renamed Product and Certification.
Our other recent acquisitions are performing in line with our expectations.
Outlook
For the full year, the Board continues to expect to deliver modest organic growth at constant currency and broadly stable underlying margins, in line with previous guidance. Given the transactions announced to date, we will significantly exceed our target guidance of 3% revenue growth from acquisitions for 2015.
Ian El-Mokadem, Chief Executive Officer, commented:
"I am pleased with our performance in the first four months of 2015. Organic growth is in line with our expectations and we are making very good progress with acquisitions. The acquisition of BM TRADA reinforces our commitment to extend the range of services we offer to our clients and the geographic reach of our business."
AGM & Half year results
The Annual General Meeting of Exova Group plc is being held today, 14 May 2015, at 10.00 a.m. at The Cavendish Hotel, 81 Jermyn Street, London SW1Y 6JF.
The Group's half year results to 30 June 2015 will be announced on 28 August 2015.
Contacts
Ian Middleton / Sophie Moate
Powerscourt Group
Tel. Direct +44 (0)20 7250 1446 / +44 (0)7885 508 527
Ian Power, Investor Relations
Exova Group plc
Telephone: +44 (0) 131 476 7619
About Exova
Exova is one of the world's leading laboratory-based testing groups, trusted by organisations to test and advise on the safety, quality and performance of their products and operations. Headquartered in Edinburgh, UK, including BM TRADA, Exova operates 142 laboratories and offices in 31 countries and employs around 4,400 people throughout Europe, the Americas, the Middle East and Asia/Asia Pacific.
Exova's capabilities help to extend asset life, bring predictability to applications, and shorten the time to market for customers' products, processes and materials. With over 90 years' experience, Exova specialises in testing across a number of key sectors from health sciences to aerospace, transportation, oil and gas, fire and construction.
This Trading Update release contains forward-looking statements that involve substantial risks and uncertainties and actual results and developments may differ materially from those expressed or implied by these statements by a variety of factors. These forward-looking statements speak only as at the date of this press release. In addition, all projections, valuations and statistical analyses provided in this document may be based on unaudited pro-forma financial information, subjective assessments and assumptions. They may use alternative methodologies that produce different results and should not be relied upon as an accurate prediction of future performance.
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