1 Summary Consistent strategy Consistent strategy delivering - - PDF document
Ben Stocks - Chief Executive Chris Tyler - Finance Director 1 Summary Consistent strategy Consistent strategy delivering results Niche positions New product development in growing, regulated markets and intellectual property 2011-2016 10%
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Ben Stocks - Chief Executive Chris Tyler - Finance Director
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Consistent strategy delivering results
Consistent strategy Niche positions
in growing, regulated markets
New product development
and intellectual property
2011-2016 In the year ended 30 November 2016 10% CAGR
in revenue
£63m
cash from
£28m
invested
£19m
cash improved
14%
revenue growth
10% EPS
growth to 17.1p
£13.6m
cash
48%
return on
employed
3
and environmental technology Specialist filters are used to protect costly
Attractive business characteristics
Niche positions:
Long life cycles Bespoke Consumable products
Robust demand drivers:
Secular trends Regulation/legislation Maintenance schedules
Barriers to entry:
Specialist design skills Engineering skills Patent protection Quality accreditation
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and operational objectives Long-term growth from developing specialist filtration and environmental technology businesses both organically and by acquisition
Strategy continues to generate
A focus on regulated markets with long-term growth prospects Four key markets
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Concerted new product development Now core to revenue growth
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Geographic expansion to support key markets
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Generate cash to invest in: Organic growth Acquisitions Dividends
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with long-term growth prospects Regulation Market growth Markets
FAA, CAA, EASA and other specific accreditations Growth in pax revenue miles 2015 - 2035
(Source: Boeing 2016)
4.8%
p.a. Aviation
International nuclear standards: NQA1, ASME, etc Long term growth in nuclear power generation capacity
(Source: IAEA)
3-4%
p.a. Energy and industrial process
Approved methods: EPA, SEPA, EU water directives Growth in water analysis consumables
(Source: company estimate)
5%
p.a. Laboratory supplies
ISO and customer accreditations; extensive qualification requirements Growth in primary aluminium usage to 2020 (Source: CRU 2016)
5%
p.a. Molten metals
1 2 3 4
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and operating companies Main operating companies Business division Principal markets
Aviation Energy and industrial process Laboratory supplies Molten metals Porvair Filtration Group Seal Analytical Porvair Sciences SELEE Corp
Microfiltration Metals Filtration
15% 35% 20% 30%
1 2 3 4
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1 2 3 4
Niche positions
Fuel systems Coolant systems Hydraulics
Growth drivers
New build Maintenance New airframes and engines Retrofit programmes
Recent new products
Inerting filters A350 Airbus NEO Bombardier C Series Mitsubishi MRJ
Competitive advantage
Installed base Design engineering Range of media Design protection
Aviation
and new product development
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1 2 3 4
Niche positions
Hot gas and gasification Pulse jet systems Nuclear remediation Polymer production
Growth drivers
Gasification build rates Maintenance schedules Nuclear clean-up Energy efficiency and security
Recent new products
E-gas™ Spares and service High strength HEPA GasPro™
Competitive advantage
Installed base Range of media Design engineering Design protection
Energy and industrial process
and new product development
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1 2 3 4
Niche positions
Analysis of inorganic chemicals in water Associated consumables Chromatography consumables
Growth drivers
Regulated water testing Higher environmental standards Developing markets Bioscience growth
Recent new products
4 new water analysis platforms 3 product upgrades 6 Chromatrap range extensions
Competitive advantage
Installed base Instrument design protection Porous plastics IP and related patents
Laboratory supplies
and new product development
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1 2 3 4
Niche positions
Aluminium cast house filtration Gray and ductile iron filtration Super alloys
Growth drivers
Aluminium consumption US auto and light truck production Increased use of high grade and exotic alloys Chinese expansion
Recent new products
Selee CSX™ / CSW™ Selee IC™ Selee SA™ Range extensions
Competitive advantage
Patent protection Metallurgical expertise US / China manufacturing
Molten Metals
and new product development
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Geographic expansion in key markets:
1 2 3 4 £28 million invested in the last five years
Americas 6 sites
2016 update:
New equipment for Caribou, ME New premises in Ashland, VA opened TEM acquired New plant for Seal In Mequon, WI opened
Revenue
46% 15%
UK
14%
Europe
UK and Europe 4 sites
2016 update:
Bioscience expansion Aviation expansion
Revenue
24%
2016 update:
New line in Xiaogan fully commissioned Joint venture in India
Asia 2 sites
Revenue
12
for the year ended 30 November 2016
to £109.4m Revenue
Microfiltration Revenue
Metal Filtration Revenue
to £10.1m PBT
to 17.1p EPS
Net Cash
1 2 3 4
13
for the year ended 30 November 2016
2015
£000
2016
£000
Revenue 109,363 95,828 Operating profit 10,669 9,801 Interest (586) (604) Profit before tax 10,083 9,197 Tax (2,347) (2,241) Profit after tax 7,736 6,956 EPS (basic) 17.1p 15.5p
1 2 3 4
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for the year ended 30 November 2016
2015
£000
2016
£000
Operating cash flow before working capital movements 13,709 12,517 Working capital movement (345) 777 Interest (161) (143) Tax (2,090) (1,836) Capital expenditure (net of disposals) (4,510) (3,337) Net cash from operations 6,603 7,978 Acquisitions (2,930) (1,087) Proceeds from issue of shares 164 34 Purchase of Employee Benefit Trust shares (77)
(1,625) (1,479) Exchange movements 760 28 Net cash at 1 December 10,738 5,264 Net cash at 30 November 13,633 10,738
1 2 3 4
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Results and progress – year ended 30 November 2016
Up 1% at constant currency:
Record aluminium revenue 89% growth in Chinese revenues 12% operating profit fall:
Revenue up 12% to £34.7m 2016
£000
2015
£000
Revenue 34.7 31.0 Operating profit 2.2 2.4
2017 outlook
Sales of proprietary filters to Chinese market underway Investments in:
1 2 3 4
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Results and progress – year ended 30 November 2016
Aviation up 21% US Industrial up 11% Seal Analytical up 6% Large projects commissioning Microelectronics: good start
15% revenue growth to a record 2016
£000
2015
£000
Revenue 74.6 64.8 Operating profit 11.8 9.7
2017 Outlook
New inerting filter New high strength nuclear HEPA filter Investment in bioscience capacity Further expansion to accommodate demand
1 2 3 4
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£28m invested in capex and acquisitions over five years; £7.4m in 2016; further investment in 2017
Aviation
New programmes:
UK production expansion US sales and manufacture expansion New products: inerting
Energy and industrial process
Further gasification bids Gasification services
Nuclear: high strength HEPA Microelectronics
Laboratory supplies
New platforms for water analysis Upgraded capability for bioscience filter manufacture
Range extensions for ChromatrapTM Licensing:
increasing
Molten metals
Chinese production
Patented formulations differentiated CSXTM share gains
Al-Li range extension Selee metal services Fiber ceramics integrated
Organic growth Acquired growth
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and outlook Results
Revenue growth
14%
EPS growth to 17.1p
10%
Net cash
£13.6m
Investment
Invested in the year
£7.4m
New or upgraded
8 PLANTS
For growth
CAPACITY EXPANSION Outlook HEALTHY ORDER BOOKS for 2017 STRONG Balance sheet Full NEW PRODUCT DEVELOPMENT pipeline POSITIVE START to 2017
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Ben Stocks - Chief Executive Chris Tyler - Finance Director