Porvair maintains profitability through tougher second half


Porvair PLC (LON:PRV) said its order books have been “building steadily” after reducing sharply in the early summer, but it will make a GBP2mln charge in its full-year results for restructuring costs.

The filtration specialist said revenues for the year to end-November, 2020, are likely to be down 7% on the previous year, having reported a 2.5% decline after nine months.

Adjusted operating profits are “in line with management’s expectations”, it added, with no figure given, but the business was said to be “consistently profitable and cash generative in the second half”, with sequential growth between the third and fourth quarters.

Net cash at year-end was GBP4.9mln, up from GBP4mln a year ago, after capital investment of approximately GBP5mln and dividends of GBP2.3mln in the year.

“The economic outlook for aerospace and some industrial segments remains uncertain but orders for the first quarter of 2021 in the Laboratory division are strong,” the company said in a trading statement.

Investment has been kept steady at pre-coronavirus levels in productivity, skills and new products throughout 2020, it noted.

The shares fell 3% to 528p in early trading on Tuesday, down 24% since the start of the year.

Peel Hunt said the decline in revenue performance since the third quarter reflected a tough fourth quarter against a strong comparative last year, with weakness in aerospace, industrial segments and the absence in of gasification revenue.

However, the broker’s analysts said profitability “should be better than we had expected”, and so upgraded their forecast for adjusted pre-tax profit to GBP12.5mln from GBP10.0mln, which excludes roughly GBP1.5mln of net exceptional items.

With the second half tougher than the first, the analysts have reduced their 2021 pre-tax profit forecast for Porvair by 8% to GBP12.0m to allow for a slightly slower recovery, but expect the company to be generating cash throughout.


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