Avingtrans Plc record adjusted profits and a solid cash position

Avingtrans plc

Avingtrans PLC (LON:AVG), which designs, manufactures and supplies critical components, modules, systems and associated services to the energy, medical and industrial sectors, has announced its preliminary results for the year ended 31 May 2021.

Financial Highlights

Revenue from continuing operations increased by 7.1% to £98.5m (2020 : £92.0m)
Gross Margin improved to 30.4% (2020 : 26.8 %)
Adjusted1 EBITDA from continuing operations increased by 78.5% to £12.5m (2020 : £7.0m)
Adjusted1 PBT from continuing operations increased to £7.7m (2020 : £2.6m)
Adjusted1 Diluted earnings per share from continuing operations were boosted to 22.4p (2020 : (8.0p)
Peter Brotherhood sold for an enterprise value of £35.0m
Net Cash excluding IFRS16 £23.3m (Net Debt 31 May 2020: £7.4m)
Dividend re-instated at 4.0p per share

 Adjusted to add back amortisation of intangibles from business combinations, acquisition costs and exceptional items 

 2020 Restated for discontinued Peter Brotherhood

Operational Highlights 


Revenue increased 11.1% to £89.0m (2020 £80.1m)
Energy Steel continues to recover positively
Award of outline planning permission for HT Luton site
Successful disposal of Peter Brotherhood
Enhanced contract to supply the important 3M3 boxes – up by £20m to £70m
Record order book for Booth


Revenue decreased to £9.6m (2020: £11.9m) as pivot away from third party component manufacture
Division transformed into a niche MRI market player, following acquisition of majority stake in Magnetica
Potentially significant market opportunities  in orthopaedic and veterinary imaging

Commenting on the results, Roger McDowell, Avingtrans plc Chairman, said:

“The Group forged ahead despite continuing adverse impact from Covid-19 and we ended the year with record adjusted profits and a solid cash position. Once again, our Pinpoint-Invest-Exit Strategy (“PIE”) has proved its worth with the successful sale of Peter Brotherhood delivering excellent returns for our shareholders. This is a great credit to our management team and excellent staff across all of our businesses and my thanks go to them for their very significant efforts and achievements and the support of our stakeholders.”

Chairman’s Statement

Despite some adverse effects from the Covid-19 pandemic, the Board was pleased with the Group’s performance for the year, with record adjusted EBITDA (note 2) from continuing operations and a very solid net cash position at year end, driven by the successful disposal of Peter Brotherhood Limited (PB) in March 2021, for an enterprise value of £35m. It is pleasing to note a number of important new order wins, both in the year and post-period end, which have bolstered the order book going into FY22.

Crucially, our Pinpoint-Invest-Exit (“PIE”) strategy came to the fore once again, not only in the disposal of PB, but also in the recovery progress at Booth and Energy Steel and in the acquisition of a majority stake in Magnetica (MNA) in Australia. Shareholders will recall that the assets of Booth Industries in Bolton, UK and Energy Steel in Michigan, USA were acquired in June 2019. Since then, both of these turnaround opportunities have made good progress, with Booth, in particular, now contributing strongly to Group results.

The divisional management teams have again demonstrated their agility and resilience in the period, continuing to build strong business platforms, despite the disruptions due to Covid-19. These effects caused us to enact certain targeted restructuring and other changes, to optimise business performance. Nonetheless, our focus remains on growing strong and valuable businesses.

Aftermarket growth in Engineered Pumps and Motors (EPM) and Process Solutions and Rotating Equipment (PSRE) remains central to developing robust value propositions, in order to support OEM and end-user customers.  The end-user access provides a more predictable and repeatable pipeline, drives improved profitability and underpins product and service development.

The EPM division delivered an improved result for the year, despite some on-going Covid-19 disruptions to supply chains and order placement. Energy Steel continued to recover positively, with good aftermarket prospects and moved to a smaller, optimal facility at the year end. The award of outline planning permission for the Hayward Tyler (“HT”) Luton site was good news, providing us with the opportunity to optimise HT’s UK operations, whilst potentially producing a net surplus for the Group when the site is exited. However, this process has been delayed by Covid-19.

The PSRE division pushed through the impact of Covid-19 and capped an excellent year with the successful disposal of Peter Brotherhood. The division refined its offering to the UK nuclear market – especially to Sellafield for nuclear decommissioning – whilst also using this capability to position itself for longer term new nuclear technologies. Post period end, we were delighted to confirm the transition of the important 3M3 box contract with Sellafield to the volume production phase and with an enhanced contract value, up by £20m to £70m. The integration of Booth has gone better than planned and the business is rapidly returning to full heath, with a record order book, including the stellar £36m contract win with HS2. Covid-19 buffeted Ormandy more than most in the financial year, but the business still turned out a decent result and we anticipate further improvements this year.

Meanwhile, the Medical and Industrial Imaging (MII) division has metamorphosed into a niche MRI player, following the acquisition of a majority stake in Magnetica and its merger with Scientific Magnetics and Tecmag. This exciting development has created a start-up MRI systems manufacturer, with eyes on alluring market prospects in orthopaedic and veterinary imaging, for example. The refocused division will continue to produce associated products in nuclear magnetic resonance and scientific magnets, in support of the core strategy. These developments are still at a relatively early stage, but the Board is excited about the long-term potential of the division, which is expected to yield longer term positive returns for the Group, albeit perhaps using a different vehicle to maximise returns than our usual “PIE” process for mature businesses.

Given the excellent overall results for the year, the Board believes that it is now right to reintroduce a full year dividend of 4.0 pence per share, which includes an element of catch up for the missing interim dividend, suspended due to Covid-19.

As well as the final dividend proposed, we intend to return to our commitment to long term shareholder returns in FY22, with both interim and final dividend payments in prospect. Our resilient view of the overall prospects for the Group, underpinned by our prudent approach to debt and financial headroom, support this decision. Given the robust balance sheet position, the Group continues to seek further shareholder value enhancing M&A opportunities.

Finally, I warmly welcome all the staff at Magnetica to Avingtrans and congratulate them and all Avingtrans employees for the dedication and determination that they have displayed in a challenging environment. We also wish our former colleagues at PB well, as they continue their success story now as part of Howden. On behalf of the shareholders, I once again thank all Avingtrans employees for their commitment to the Group during the past year, as we look forward with eagerness to FY22.

Roger McDowell


28 September 2021

Strategy and business review

Group Strategy

Our core strategy is to buy and build engineering companies in niche markets, particularly where we see turnaround and consolidation prospects; a strategy we call Pinpoint-Invest-Exit (“PIE”). We have had a strong track record in returning significant shareholder value over the past decade and FY21 was another successful year, with the January 2021 acquisition of a majority stake in Magnetica and the disposal of Peter Brotherhood in March 2021.

With an increased presence in our target markets, a focus on aftermarkets, strength in depth of the management teams and a lean central structure, the Group continues to grow profitably – despite the effects of Covid-19 – and the Board is focused on seeking additions to the Avingtrans value-add proposition.

The majority of the Group’s adjusted key financial metrics trended positively in the period, particularly in light of Covid-19 and the effect of acquiring a start-up business during the year.

The Group is focused on the global Energy and Medical markets, both of which play into some of the world’s mega-trends, such as: urbanisation; an ageing population; and an accelerating transition towards a cleaner and healthier planet.

Divisional Strategies

Engineered Pumps and Motors (Energy – EPM): EPM continues to develop its nuclear installed base (civil, defence and national security) – notably for life extension applications – and its offering to the hydrocarbon market sectors. Energy Steel in North America (acquired in June 2019), which specialises in nuclear life extension, continues to recover well. In addition, the EPM business continues to develop solutions for new nuclear technologies and other low carbon energy sources, such as concentrated solar, to capitalise on the global energy supply transition. During FY21, EPM delivered a number of key contracts, including pumps for next generation nuclear business TerraPower in the USA and pumps for a major new concentrated solar power plant in Dubai. Partnership agreements (eg with Ruhrpumpen and Shinhoo) are an important element of the EPM strategy, providing us with a broader product portfolio and cross-selling opportunities.

Process Solutions and Rotating Equipment (Energy – PSRE): Here, the primary strategy is to develop a comprehensive offering to the nuclear decommissioning and reprocessing markets, building on the long-term contracts to build nuclear waste storage containers and the installed base of equipment across the vast Sellafield site. Post period end, Metalcraft and Sellafield Limited entered into the second phase of the contract to provide high integrity stainless steel storage boxes for Sellafield. The 3M3 (‘three metre cubed’) box contract is now worth up to £70m, being a £20m uplift to the original contract awarded in 2015. During the year, the division’s nuclear credentials were enhanced by the strong recovery of Booth Industries, which also broadened our market reach into Critical National Infrastructure (CNI). Amongst others, Booth won a major new multi-year contract with HS2 in the period, worth £36m. The PSRE division is witnessing a strong pipeline and remains well poised to bid for and capitalise on opportunities as they arise.

Medical and Industrial Imaging (Medical – MII): Following the Magnetica acquisition in January 2021, the focus for the medical division pivoted towards becoming a niche market leader in the production of compact helium-free MRI systems, for applications such as orthopaedic and veterinary imaging. This is an exciting opportunity for the Group. In parallel, we have moved to exit from volume MRI components supply to customers such as Siemens, preferring to concentrate on our own product development. In support of the core strategy, the division will continue to work on niche Nuclear Magnetic Resonance (NMR) and scientific magnet products and services, since these are complementary technologies.

The common theme which we are seeking to develop across the energy and medical divisions, is the continued pressure on aftermarket expenditure, where operational efficiency, reliability and safety are paramount and operators are looking to their supply chain partners to provide long term support of both new infrastructure and legacy installations



Continuing our Pinpoint-Invest-Exit strategy, Avingtrans acquired a majority stake in Magnetica (AUS), in January 2021, merging this with our other MRI related businesses, Scientific Magnetics (UK) and Tecmag (US). The objective is to create an innovative niche MRI systems manufacturer, with the technology to drive new MRI imaging applications and business models. To date the integration of the three businesses is on track and making good progress towards commercial product availability. The integrations of FY20 acquisitions, Booth and Energy Steel, both went well during FY21 and they were each able to deliver a profit for the Group, with Booth’s recovery being very robust and ahead of management’s expectations.

During the period, we obtained Outline Planning Permission (OPP) for the redevelopment of our HT Luton site, comprising up to 1,000 residential units. Covid-19 has delayed our plans with respect to the site and discussions are ongoing.

M&A activity in energy capital goods markets has been surprisingly robust despite Covid-19 and businesses like ours continue to command high valuations. This was evidenced by the March 2021 disposal of Peter Brotherhood, which was acquired for £9m, as part of the Hayward Tyler Group in 2017. The disposal was for £35m enterprise value – almost four times the price paid for the business in a four year period. This demonstrates the validity of the PIE model and our approach to business turnaround. Consequently, Avingtrans remains confident about the current strategic direction and potential future opportunities across its chosen markets.

Markets – Energy

The global demand for energy experienced a hiatus, due to Covid-19, but we believe that we will see a consistent return to growth now and the effect of the pandemic may be to drive faster towards increased efficiency and decarbonisation. This trend may benefit our businesses in the nuclear and renewables sectors.


End User/Aftermarket

Operators and end-users demand a blend of quick response through local support and a requirement to drive improvements through equipment upgrades and modernisation. In the West, where facilities are being operated for longer than their intended design lives, there is a strong demand for solution providers in the supply chain to partner with end-users for the longer term. The Avingtrans energy divisions are well positioned to grow in this end-user market space.


Nuclear energy as a low carbon, baseload power source remains an asymmetric market with respect to future growth. Almost all the 1GW+ new build opportunities are currently in Asia, with the exception of the limited UK programme. However, we are still experiencing buoyant market segments, including supporting the operational fleet, continued safe operation and life extensions, decommissioning and reprocessing. We are also working on the long-term development of the next generation of technologies, such as Small Modular (SMR), or Advanced Generation IV Reactors – eg with TerraPower. In addition, these segments all have the backdrop of a consolidating supply chain and paucity of expert knowledge.

The USA still operates the biggest civil nuclear fleet in the world, with 94 reactors generating around 30 percent of the world’s nuclear electricity. Coupled with the heritage Westinghouse technology operating in Europe and Asia, the EPM division’s long-standing position in this market provides opportunities for further growth.  Obsolescence and life extension are key issues for nuclear operators worldwide and the Avingtrans Energy Divisions are well positioned to support operators in addressing this critical risk. The acquisition of Energy Steel in the USA in 2019 further bolstered the Group’s capabilities in this regard.

The UK remains pre-eminent when it comes to decommissioning and reprocessing, in terms of innovative technology and overall spend. The Group is embedded in the future manufacture of waste containers for Sellafield and will continue to expand its presence in the UK and globally in the longer term. The development of new nuclear technologies is ongoing, with pockets of activity in the UK, South Korea, the USA and China dominating development activity. The Group views these new technologies as an attractive route forward for nuclear and is well positioned to develop as a global industry partner.

Power Generation

The world continues to electrify, with an increasing amount of primary energy going to the power sector, which remains a key focus across the Group’s energy divisions. Aside from nuclear, the main sub-sectors are as follows:

– Coal – the Group continues to see good aftermarket activity from coal fired power stations even though the demand for new power stations is in decline.  Opportunities still exist in India, China, South East Asia, Eastern Europe and the Middle East. EPM is optimising its product line, to take market share and to create tomorrow’s aftermarket.

– Gas – natural gas, primarily in the form of combined cycle gas turbine power plants is a growing market space, primarily in the West.  The Group is moving into this market with both existing and new product lines.

– Renewables – renewable technologies and their supporting infrastructure are a growing market globally. The Group has a range of products that can be applied directly to this market segment and also has expertise that can be used to develop new products for niche parts of this market, such as molten salt for concentrated solar applications.


The Covid-19 pandemic had a dramatic effect on oil & gas supply and demand, with the Brent crude price collapsing in 2020 and now trading in the range of $ 70 to $ 7 5 per barrel, with most informed forecasts suggesting a n   on-going recovery .   As a result , new capital expenditure in this sector w as materially reduced and has not yet recovered to pre-covid levels.   Therefore, our forecasts must continue to exhibit prudence , with some limited restructuring activity in EPM being completed in the first half of FY21 in response to the market conditions. However, aftermarket orders continue to be won, so there is some positive news in this area.

Digitalisation & Condition Monitoring

Companies across the energy market continue to invest in digital technologies to improve productivity, efficiency and predictability in the field.  At the equipment level this translates to a series of devices, sensors and algorithms which can predict breakdowns before they occur and ensuring equipment is running at its optimum performance. The Group has continued to develop and refine its capabilities in this regard, having launched its first monitoring product, DataHawkTM, three years ago.

Markets – Medical

The Diagnostic (medical) and molecular imaging markets are large global sectors, dominated by a few large systems manufacturers. The total Diagnostic Imaging Market will be worth $33.5bn by 2024, according to Markets and Markets and is expected to continue to grow at over 5% per annum over that period. The largest market is the USA, followed by Europe and Japan. The fastest growing markets are China and India.

Following the acquisition of a majority stake in Magnetica (AUS) in January 2021, we merged Magnetica with Scientific Magnetics (UK) and Tecmag (US). The objective of this pivot is to create an innovative, niche-MRI systems supplier, which can address specific parts of the market, not well served by dedicated products at present. This includes orthopaedic and veterinary imaging. Although Magnetica is primarily targeting the Magnetic Resonance Imaging (MRI) market, Nuclear Magnetic Resonance (NMR) continues to be of interest, due to the common thread requirements for superconducting magnets and cryogenics. These two segments account for approximately 85% of our business in the medical division. Market drivers for these segments include an ageing global population and the global pharmaceutical industry’s research needs.

MRI itself is approximately 18% by value of the total diagnostic Imaging market and is projected to grow at 6% p.a. (Grand View Research). NMR is a smaller market, currently estimated at $861m p.a. by Marketwatch and is projected to grow at over 3% p.a. until 2026, with Bruker enjoying a dominant market share.

End User/Aftermarket

The MRI market segment is dominated by a handful of manufacturers, including GE, Siemens, Philips and Canon, who account for circa 80% of revenue globally. These players also dominate the aftermarket, though there are a few independent MRI service businesses in existence. Avingtrans is not present in the MRI aftermarket at this time.

The NMR market is similar, currently dominated by Bruker and Jeol. Avingtrans is aligned with MR Resources Inc, a well-established US business, which services the NMR aftermarket.


As noted above, the MRI market segment is dominated by a handful of global manufacturers, and we do not intend to compete with them. However, following the planned pivot to niche full system supply noted above, Avingtrans has moved in parallel to exit component supply and this process has advanced materially in the year. We anticipate a temporary reduction in divisional revenues, as component manufacture ends, since there will then be a gap before we launch our own systems. Our first target is orthopaedic imaging, where encouraging development of our prototype system is on-going. We currently anticipate commercial launch of this product during 2023, subject to regulatory approval in target markets. 


We are aligned with recent market entrant Q One Instruments, China and also with MR Resources of the USA, as noted above. Together, we form an alliance to challenge the dominance of the existing players and to provide customers with an additional source for NMR products, service and support.


Operational Key Performance Indicators (KPI’s)for continuing operations

Percentage of total continuing revenue deriving from aftermarket (AM) sales (%)41.442.7
Customer quality – defect free deliveries (%)98.998.0
Customer on-time in-full deliveries (%)69.878.1
Annualised staff turnover including restructuring (%)22.014.6
Health, Safety and Environment incidents per head per annum0.070.09

The AM sales % has reduced marginally. This is mainly due to the lack of access to US nuclear plants, caused by Covid-19. Covid-19 delays also continued to affect AM order timings – especially at EPM, in the nuclear aftermarket. For customer quality, we sustained our usual high level of defect free deliveries, though on time deliveries fell back in the year, again due to Covid-19 induced supply chain disruption Annualised staff turnover increased, due to restructuring at EPM (caused by Covid-19 effects on the oil and gas market) and at Metalcraft (driven by our exit from the MRI component manufacturing business). The long-term positive reduction of HSE incidents continues, though each new acquisition presents us with fresh HSE challenges.

EPM Division – Energy

For the EPM division, which represents the bulk of the former Hayward Tyler companies, the main priorities remain to strengthen the aftermarket capabilities and to maximise opportunities in the nuclear life extension market.

The division’s results improved in the period, having been disrupted by Covid-19 in the prior year. Whilst some adverse Covid-19 effects lingered into FY21, the impact was less pronounced than previously, so EPM was able to make headway once more.

At HT Luton, a targeted, largely voluntary, restructuring programme was implemented early in the period. This was necessary because Covid-19 badly disrupted the market for new capex into oil and gas. However, aftermarket activities continue to build, including the servicing of third party equipment. The £10m contract in Sweden with Vattenfall for the Forsmark plant (for nuclear life extension) made good progress overall and is expected to complete in FY22. Further defence orders have been received and are being executed on target. Following the receipt of planning permission to develop the HT Luton site into up to 1,000 dwellings in the period, plans are underway to move the business to a new, optimised location, although this process was also delayed by Covid-19 effects outside of our control.

HT Inc in Vermont (USA) continues to see solid order intake in the nuclear life extension market in the USA – and again with KHNP, South Korea, although delays in order intake (due to Covid-19 affecting customer site access) did impact the US results again. HT Inc’s new R&D opportunities – in next generation nuclear power and concentrated solar power – are also making good progress, with first products shipped to TerraPower in the period.

HT Kunshan (China) delivered their contract in China (worth £2.2m) in the period for specialist pumps being installed in a major new concentrated solar power plant in Dubai. This renewables market sector has several good prospects for follow-on from this initial win.

HT India continued to suffer from order and delivery delays and disruptions due to Covid-19, but the business was still able to record a modest profit in the period.

Energy Steel (‘ES’) in Michigan (USA), continued to progress on its recovery path, chalking up another small profit, in the period. Importantly, at the end of the year, ES completed a move to a new smaller facility, thus reducing overheads going forward and rightsizing its capacity. The integration of sale with HTI is now complete and the business has started to win new orders from previously untapped customers, including orders deriving from a nuclear “orphan” IP acquisition.

PSRE Division – Energy, safety and security

PSRE had another very good year, helped along by the successful disposal of PB for £35m enterprise value in March 2021. The results of the continuing businesses were supported by a strong recovery at Booth, which now has a record order book, including the HS2 £36m contract awarded in the period. Booth also made progress with its factory extension, though construction was delayed materially by Covid-19. The blast and security high integrity doors niche which Booth occupies, is one which we can defend vigorously, to rebuild Booth into a leader in its chosen markets, both in the UK and now internationally.

Metalcraft’s progress with the Sellafield 3M3 boxes was again steady- and our progress was rewarded (post period end) by the confirmation by Sellafield of our transition to phase two of the box contract. The contract value was also boosted to £70m (previously £50m) with circa 1000 boxes to be delivered over the next six years. Metalcraft is the only supplier to transition to phase two of the contract. The next 3M3 box contract tender has now been even further delayed due to Covid-19 disruptions to Sellafield’s plans. This delay is disappointing, but we are now very well placed to pursue this contract later and it does not impact on our forecasts, which allow for unexpected customer delays.

Ormandy’s performance was pleasing in the year, since it was more disrupted by Covid-19 than other business units. Nonetheless, the HVAC market held up and a strengthened sales team improved results and the business is well-placed for the future.

The Fluid Handling business in Scotland is a consistently good performer and continues to build a wider nuclear capability. In the period, this unit won its biggest ever order (£2.5m) for Sellafield, to repair and upgrade remotely monitored valves. Further life extension and decommissioning opportunities are being pursued. Post period end, a contract worth £4.4m was secured with Doosan, as a prime contractor for Sellafield. This was notable, because it required Fluid Handling, to work with Metalcraft and HT Luton, to secure the order.

MII – Medical Division

MII is a division in pro-active transition. We have been pivoted away from the custom business previously targeted by Scientific Magnetics (SM) and working towards new products in Magnetic Resonance Imaging (MRI), driven by the acquisition of a majority stake in Magnetica (MNA) in January 2021. With MNA, SM and Tecmag now all integrating as one business, the focus is fully on niche-MRI systems and we are making good progress on this exciting major project.

MNA will continue to work on products for the adjunct Nuclear Magnetic Resonance (NMR) market, including service and support offerings with our third party partners.

In parallel with our pivot to MRI systems, Metalcraft’s UK and China business for MRI components was being gradually wound down and this process will conclude in FY22. Therefore, the remainder of this operation has recombined with its sister unit in PSRE, to simplify reporting there.

Composite Products had a good year, with increasing deliveries to Rapiscan for package scanning equipment and the development of other customers, such as Arrival for electric vehicle composite components. Again, due to the focus on MRI in the medical division, it is now a better fit for Composite products to move into the PSRE division.

Financial Performance

Key Performance Indicators

The Group uses a number of financial key performance indicators to monitor the business, as set out below (all items are “from continuing operations” after restating for discontinued PB).

Revenue: 7.1% increase – good underlying organic growth

Overall Group continuing revenue increased to £98.5m (2020: £92.0m), driven by organic growth in the EPM and PSRE divisions and despite some on-going contract delays caused by Covid-19.

Profit margin: another significant improvement in results, despite Covid-19

Adjusted EBITDA (note 2) increased by 78.5% to £12.5m (2020: £7.0m). PSRE was boosted by strong results across the division and a robust return to profit at Booth. The profit margins in the EPM division also continued to improve, following some restructuring caused by the Covid-19 impact on oil and gas markets.

Operating profit was £6.1m (2020: profit £0.6m), in line with the EBITDA improvement seen above.

Gross margin: strong progress, with Booth now contributing positively

Group gross margin improved to 30.4% (2020: 26.8%) due to the improving gross margin mix from the former HTG business units and the recovery at Booth, as our transformation programme continues to bear fruit.

Tax: future profits and cash protected by available losses

The effective rate of taxation at Group level was a 7.0% tax charge. A tax refund due in the US kept the charge lower than expected and the use of brought forward losses in the UK. The tax position will be aided further in the coming years by utilisation of losses in the UK and China. We continue to be cautious, not recognising all of the potential trading tax losses in the UK.

Adjusted diluted Earnings per Share (EPS): a 181% improvement

Adjusted diluted earnings per share from continuing operations (note 4) was boosted to 22.4p (2020: 8.0p) reflecting the underlying growth in results and PB being restated as a discontinued operation. Including 73.9p from the disposal of PB and discontinued operations resulted in Adjusted diluted earnings per share attributable to Shareholders of 96.2p (2020: 16.2p).

Basic and diluted earnings per share attributable to Shareholders increased to 85.4p (2020: 4.4p) and to 83.6p (2020: 4.3p).

Funding and Liquidity: substantial net cash position, following Peter Brotherhood disposal

Net cash (including IFRS16 debt) at 31 May 2021 was £20.3m excluding IFRS16 debt, net cash was £23.3m (31 May 2020: net debt: £16.4m excluding IFRS16 debt at 31 May 2020 was £7.4m). The cash flows generated from the strong underlying profits were partly absorbed by a £2.2m working capital outflow, partly due to the envisaged further working capital outflow for the ES and Booth acquisitions, the timing of various contracts and a lower level of advance payments, resulting in an operating cash inflow of £6.4m for the year (2020 outflow £0.1m). In addition the cash inflow£26.6m (net of disposal costs) generated on the disposal of PB meant the Group moved into a substantial net cash position . The Directors consider that the Group has sufficient financial resources to deliver strategy, so the Group is actively looking for further value enhancing opportunities.

Dividend: full year progressive dividend reinstated

The Board believes that it is now appropriate to reinstate the full year dividend and proposes a dividend of 4.0p per share (2020: Nil p – suspended due to Covid-19). We return to our commitment to long term shareholder returns via dividends from this year and we also intend to reinstate progressive interim and final dividends for FY22. The dividend will be paid on 10 December 2021 to shareholders on the register at 29 October 2021.



There were no changes at Board level in the period. Top level divisional management teams were largely unchanged. The management teams in each of the three divisions continue to be strengthened, with a number of key appointments being made in the year. The recruitment emphasis remains on the importance of the aftermarket opportunities. Skills availability is always a challenge, more so after Brexit and the effects of Covid-19. However, we do not expect to be unduly constrained by shortages, given the global economic situation. The Group continues to invest significant effort in developing skills in-house, through structured apprenticeship programmes and graduate development plans.

Our workforce is becoming ever more integrated and this provides additional capability, capacity and innovative thinking, to support our global blue-chip customer base.

Environmental, Social and Governance (ESG) Report

Avingtrans believe that operating in a safe, ethical and responsible manner is at the heart of creating sustainable value for all our stakeholders.

Our goal is to embed sustainability into our pinpoint-invest-exit business strategy. In 2021, we have reassessed our approach to sustainability with a view of integrating a sustainability strategy within our core business activities, aligning ourselves with the UN’s Sustainable Development Goals (SDGs).

The SDGs set out the UN agenda for people, planet and prosperity, aim to achieve a prosperous, inclusive and sustainable society for all by 2030.

The SDGs provide all businesses with a new lens through which to translate the world’s needs and ambitions into business solutions. These solutions will enable companies to better manage their risks, anticipate consumer demand, build positions in growth markets, secure access to resources, and strengthen their supply chains, while moving the world towards a sustainable and inclusive development path.

We have reviewed the SDGs alongside our operations and consider the following to be our priorities:

– Health, safety, and wellbeing

– Operational eco-efficiency

– Development of new technologies


The Group’s environmental policy is to ensure that we understand and effectively manage the actual and potential environmental impact of our activities. Our operations are conducted such that we comply with all legal requirements relating to the environment in all areas where we carry out our business.

During the period covered by this report, the Group has not incurred any significant fines or penalties, nor been investigated for any significant breach of Environmental regulations.

Statement of carbon emissions – compliance with Streamlined Energy and Carbon Reporting (SECR)

This is our first year of carbon reporting emissions under the SECR regime. The group have elected to voluntarily disclose the carbon reporting emissions under the SECR regime to provide stakeholders with a clear understanding of the group’s position with regards to carbon emissions. In the year we have captured energy use across our UK sites and it is our intention to include all remaining (overseas) entities in our next annual report.

The Avingtrans business model is Pinpoint, Invest, Exit with most businesses sold within a three to five year time frame. As a result of our business model we expect to see significant fluctuation in energy use each year.

The methodology for this assessment has used the 2020 and 2021 emission conversion factors published by Department for Environment, Food and Rural Affairs and the Department for Business, Energy & Industrial Strategy. The assessment follows the location-based approach for assessing emissions from electricity usage and has used the UK electricity emissions factors (for generation and transmission and distribution).

The data in the tables below is drawn from our 7 locations in the UK. Carbon reporting is aligned to our financial statements, consequently we have excluded the results from our discontinued operations.

The following highlights Avingtrans’ emissions and intensity ratios:

Scope 1:
Gas  714
Oil  471
Distribution  103
Company car travel  3
Scope 2 – Purchased electricity1,119
Total emissions tCO2e2,410
Total energy consumption kWh11,270,821
Intensity metrics:
Employees – UK sites423
Emissions tCO2e per employee5.7
Revenue (£m) – UK sites60.0
Emissions tCO2e £m of revenue40.2

Given the disruption to the operations in the year resulting from the covid-19 pandemic (and this being the first year of reliable data capture) we have not set Group goals at this point. A number of our sites that hold the ISO 14001 environmental standard are already working towards achieving their site-specific goals.

Operational eco-efficiency

Operational eco-efficiency plays a key role in our business. It supports our plan to maximise profitability, strengthen our competitive position, and provide customers with the highest quality of services. Our efforts to reduce energy use and prevent pollution also support our commitment to our employees, the environment, and the communities in which we are a part.

ISO 14001 Environment Management Systems

During the year Hayward Tyler China achieved the ISO14001 Environmental Management Systems accreditation, bringing the total number of our sites with this accreditation to 6. This accreditation ensures that our businesses are focused on their environmental impact, supported by effective management processes.

LED lighting systems

A significant proportion of our sites’ energy consumption is spent on lighting. We have been installing energy efficient LED lighting systems across several of our sites. As well as improved lighting efficiency, brighter lights improve employee safety, and provide improved monitoring. At our latest installation, we expect the new lighting to give 50% efficiency improvements on the previous lighting, plus we expect further improvements to be derived from the smart monitoring systems.

On-site power generation

On site power generation can significantly reduce the environmental impact compared to purchasing power from the grid.

At Peter Brotherhood, we installed a Combined Heat & Power unit. The system burns natural gas to produce electricity and the excess heat is used to warm the building and can be converted and used for air conditioning. Excess electricity is sold back to the grid. Following the disposal of PB, we are considering whether this option is appropriate for other sites.

The significant footprint on some of our sites provides a good opportunity for solar power.  Our Luton business has already installed a solar array to generate on site power there.

Development of new technologies

Next generation nuclear power: Small Modular Reactors (“SMRs”)

SMRs are advanced power plants that can be largely built in factories as modules to minimise costly on-site construction, and which allow manufacturers to reduce costs by producing many identical units. More than 70 designs of small modular reactor are in development in 18 countries around the world, mostly based on Gen III+ reactor technologies which are relatively close to commercial readiness.

The UK arm of our Hayward Tyler business is collaborating with the Nuclear Advanced Manufacturing Research Centre to develop a new reactor coolant pumps (RCP) for small modular reactors (SMRs) and help the UK supply chain prepare to produce critical components for the global SMR market.

Next generation nuclear power: Molten Chloride Fast Reactor (“MCFR”)

Our US Hayward Tyler business has developed high-temperature molten salt pumps destined for a state-of-the-art Integrated Effects Test (IET) facility, under development by Southern Company and TerraPower to advance development of the Molten Chloride Fast Reactor (MCFR). This is a transformational, fourth-generation, molten salt nuclear technology, designed to enable low-cost, economywide decarbonization. Located at TerraPower’s Everett, Washington facility, the IET is a non-nuclear, externally heated multi-loop system intended to test and validate integrated operation of MCFR systems as well as demonstrate multiple auxiliary MCFR functions.

From fission to fusion

The giant fusion reactor, currently under construction in France (ITER) will be used as a global demonstrator of fusion technologies, in the lead up to eventual full-scale fusion power plants. Like nuclear fission, fusion is free of carbon emissions (except for construction), but also has the benefit of a much smaller and less hazardous waste stream. Hayward Tyler in the USA is working with the US government, to design and produce specialist pumps for ITER, as part of the US contribution to the project. 

Nuclear waste remediation: Sellafield 3m3 boxes

The extension of Metalcraft’s 3m3 box contract with Sellafield marks a transition to volume production of these containers. The boxes will be used to store intermediate level waste (“ILW”) retrieved from silos at legacy locations in Cumbria. In environmental terms, this storage project represents one of the most positive and important intergenerational equity deliverables of the next few decades, developing and implementing critical technology to bequeath a pristine environment to posterity.

As part of this transition, Metalcraft will be producing circa 1,000 boxes over phase two of the programme, which is currently expected to take 6 years. Since 2015, Metalcraft has invested to create the only dedicated facility to supply boxes for ILW in the UK. As a result, Metalcraft believes it is in a leading position to tender for future decommissioning contracts at Sellafield over the duration the site decommissioning.

Renewables: Concentrated Solar Power (CSP)

Hayward Tyler in China supplied a glandless pump package to a major Chinese EPC, Shanghai Electric Corporation, for installation at Bin Rashid Al Maktoum Solar Park Phase IV. This is a 950MW Concentrated Solar Power (CSP) and Photovoltaic (PV) hybrid power plant. The project makes use of three different technologies to generate clean energy, consisting of 600MW from a parabolic basin complex, 100MW from a solar tower, and 250MW from PV panels.

It is the world’s largest project using Concentrated Solar Power on a single location. The Dubai solar park is an important project supporting the Dubai Clean Energy Strategy, which aims to increase Dubai’s use of clean energy to 75% of their total energy mix by 2050.

Magnetic Resonance Imaging (MRI): Going helium-free

Existing MRI systems rely on liquid helium, to cool the superconducting magnets at the heart of each system. Helium is a scarce, non-renewable resource, mostly obtained as a by-product of oil extraction. Therefore, in our new compact MRI designs, we are seeking to take advantage of the smaller system footprint, to enable us to rely on mechanical cooling only, thus eliminating use of helium entirely in these systems. 


Social Responsibility

It is paramount that the Group maintains the highest ethical and professional standards across all of its activities and that social responsibility should be embedded in operations and decision making. We understand the importance of managing the impact that the business can have on employees, customers, suppliers and other stakeholders. The impact is regularly reviewed to sustain improvements, which in turn support the long-term performance of the business. Our focus is to embed the management of these areas into our business operations, both managing risk and delivering opportunities that can have a positive influence on our business.


The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them directly and on financial and broader economic factors affecting the Group. The Group regularly reviews its employment policies. The Group is committed to a global policy of equality, providing a working environment that maintains a culture of respect and reflects the diversity of our employees. We are committed to offering equal opportunities to all people regardless of their gender, nationality, ethnicity, language, age, status, sexual orientation, religion or disability. We believe that employees should be able to work safely in a healthy workplace, without fear of any form of discrimination, bullying or harassment. We have been rolling-out a “dignity and respect” training program across the Group. We believe that the Group should demonstrate a fair gender mix across all levels of our business, whilst recognising that the demographics of precision engineering and manufacturing remain predominantly male, which is, to an extent, beyond our control.

Apprenticeships and training

All larger group locations are running apprenticeship schemes for young people, both to act as socially responsible employers and to optimise the demographics of our workforce over the mid to long term. The most developed of these schemes is at Metalcraft in Chatteris, UK, where the scheme there is very well established and has won multiple national awards over the past several years. This scheme is now being taken to another level (post-period end) with Metalcraft being given planning permission to construct a new training school on the Chatteris site, with construction work now underway.

The centre will be funded through a £3.16million grant from the Cambridgeshire and Peterborough Combined Authority and will provide training across a range of vocational subjects for between 80 and 130 apprentices per year, for the entire local area 

Health, safety, and wellbeing

The Group takes H&S matters and its related responsibilities very seriously.

As regular acquirers of businesses, we find different levels of capability and knowledge in different situations. Often, a key investment need in smaller acquisitions is to spread H&S best practice from other Group businesses and bring local processes up to required standards. Larger acquisitions (such as HTG previously) usually have well developed H&S processes and we seek to learn from these in other business units.

Employee equality, welfare and engagement are critical for developing our key asset. We focus on pro-active actions including internal training, certifications, and employee engagement through listening, survey and involvement.

Covid-19 has been the biggest health and safety issue for the Group this year. Fortunately, the nature of our products and the topography of our factories have given us a good base to work from, to make our workplaces Covid-19 safe. We have an overall set of guidelines to work to, derived from government policies around the world and local teams in each business adapt these to the specifics of their individual site. These measures include:

– Shielding of vulnerable employees

– Working from home where feasible

– Factory and office re-layouts to facilitate social-distancing

– Enhanced cleaning and site hygiene

– Additional use of PPE equipment where necessary

– Minimisation and careful management of third-party visitors to our sites

Where our employees have to visit other third party sites, they have protocols from their business unit to follow and must also adhere to the policies and procedures of the site which they are visiting. Each business has a team responsible for ensuring that the Covid-19 plan is kept up to date and adapted, if required, as the circumstances of the pandemic continue to evolve. Taken as a whole, these measures have allowed us to operate at a consistently high level of effectiveness throughout the pandemic and ensured that we have minimised any loss of output, whilst keeping all employees safe.

Our Health and Safety KPIs can be found in the key performance indices section of the strategic report. Health and Safety incident reporting has improved across the Group and trends have generally been improving over recent years. Near miss reporting and knowledge exchange is also positively encouraged, to facilitate learning and improvement. At Board level, Les Thomas has H&S oversight and he conducts inspections with local management as appropriate.

Ethical policy

The Group complies with the Bribery Act 2010. We do not tolerate bribery, corruption or other unethical behaviour on the part of any of our businesses or business partners in any part of the world. Employee training has been completed in all areas of the business to ensure that the Act is complied with.


Avingtrans is a niche engineering market leader in the Energy and Medical sectors, with a successful profitable growth record, underpinned by our ‘PIE’ strategy. Recent acquisitions will provide further opportunities for the Group to build enduring value for investors in resilient market niches. We will continue to be frugal and seek to crystallise value and return capital when the timing is right, as part of the PIE strategy implementation. Our PIE strategy has served us well in the current crisis and could result in further opportunities to grow shareholder value.

The Group continues to invest in its three divisions, with a focus on the global energy and medical markets, to position them for maximum shareholder value via eventual exits in the years to come. The integration of Magnetica is proceeding to plan. The previous acquisitions of Booth and Energy Steel are recovering well, as demonstrated by the results in the period. The Peter Brotherhood disposal has left the Group in a strong net cash position, so we are proactively pursuing potential PIE prospects, with the ability to capitalise on any suitable strategic opportunities. Our value creation targets continue to be accomplished as planned and are underpinned by a conservative approach to debt.

The energy divisions have a strong emphasis on the thermal power, nuclear and hydrocarbon markets and aftermarkets. Following the acquisition of a majority stake in Magnetica in the period, the medical division has pivoted to focus on compact, helium-free MRI systems, which the Board believes could create significant future shareholder value. To drive profitability and market engagement, each division has a clear strategy to support end-user aftermarket operations, servicing its own equipment and (where pertinent) third parties, to capitalise on the continued market demand for efficient, reliable and safe facilities.

The on-going disruption caused by the Covid-19 pandemic remains our biggest uncertainty. However, we have taken rapid and effective cost and risk mitigation actions so far, to limit any potential downside and we will continue to be on our guard.

Despite the impacts of Covid-19, our markets continue to develop and M&A opportunities remain a priority for us. Businesses like ours can command high valuations at the point of exit, as demonstrated by the disposal of Peter Brotherhood. The Board remains cautiously confident about the current strategic direction and potential future opportunities across our markets. We will continue to refine our business by pinpointing specific additional acquisitions as the opportunities arise, to create superior shareholder value, whilst maintaining a prudent level of financial headroom, to enable us to endure any subsequent headwinds, whether deriving from Covid-19, or otherwise.

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