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Avingtrans maintains H1 momentum, confirms positive outlook for FY25

09:18, 16th January 2025
Paul Hill
PMH Capital
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Due to crippling redemptions over the past 3 years, many open-ended UK fund managers have become forced sellers. This has artificially depressed smallcap valuations, but equally gifted risk-tolerant investors some of the best buying opportunities in a generation.

Take specialist engineer Avingtrans (AVGFollow | AVG, which over the past 15 years has knocked the ball out the park (see chart) by executing its successful "Pinpoint-Invest-Exit" (PIE) strategy, buying quality businesses at bargain prices, materially improving performance, and then disposing of them at much higher values.

True to form, today in another positive update, the company said that "Nov H1'25 trading was in line with expectations".

Here, Advanced Engineering Systems (AES) has executed well again, with a standout performance from 'Booth Industries' after completing endurance testing for the HS2 tunnel "doorset" ahead of full-scale production later this year - potentially also opening the 'blast-proof door' to further HS2 contracts and similar projects internationally.

But that's not all.

Elsewhere within AES, there's a treasure trove of other high-quality assets (eg nuclear, oil & gas, defence and industrial sectors), some of which might be disposed of over the next 12-18 months and generate material cash returns.

The Healthcare division too continues to attract new distribution partners for its innovative smallform 3D X-ray and MRI scanners in both the US and Europe. Revenues are climbing according to plan with more material volume increases anticipated in FY26.

CEO Steve McQuillan commenting: "Avingtrans continues to have a strong order book as we benefit from favourable macro conditions in the energy, infrastructure, and healthcare sectors. We remain confident in our ability to meet May FY'25 expectations and this reflects our ongoing commitment to delivering value and achieving our strategic objectives."

Lastly, Singer Capital Markets has a 525p/share target price (nb based solely on AES), and are forecasting FY'25 turnover, EBITDA, and adjusted EPS of £161m, £15m and 14.3p respectively - underpinned by a robust pipeline and 90%+ revenue cover. On top, Singers believes the medical devices division is worth between £85m-£140m or another 251p-422p/share.

Nov H1'25 results are scheduled for 26th Feb'25.

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Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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