Final Results

Avingtrans plc ("Avingtrans" or the "Group") Final Results for the Year Ended 31 May 2012 Avingtrans plc, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, medical and industrial sectors, today announces its results for the twelve months ended 31 May 2012. Financial Highlights * Turnover increased by 21% to a record Â£44.0m (2011: Â£36.3m) * Gross profit margin of 27% (2011: 29%) on adverse product mix * Adjusted1 EBITDA improved by 26% to Â£4.2m (2011: Â£3.3m) * Adjusted1 PBT increased by 43% to Â£2.3m (2011: Â£1.6m) * Fully diluted, adjusted1 EPS of 7.5 pence per share (2011: 5.5 pence per share) * Cash generated from operations was Â£2.2m (2011: Â£3.0m) * Net debt increased to Â£8.4m (2011: Â£6.6m) - Â£0.7m of this due to the Sigma Composites acquisition * Gearing rose to 36% (2011: 29%) * Final Dividend boosted to 1.0 pence per share (2011: 0.4p) 1 -adjusted to add back amortisation of intangibles from business combinations, share based payment expense and impairment of goodwill. OperationalHighlights * Order book at record level * Sigma and C&H enjoyed strong growth in the civil aerospace market, with the division achieving 10% operating margin and growing by 34%. Sigma UK had its best year so far, in terms of growth and profit. * Sigma China made a profit for the year again and grew by 52%. * C&H continued to grow positively and strengthened its position with Rolls Royce. * The acquisition of the Sigma Composites business in February required initial investment of Â£0.3m, but has already supported the win of the Clean Sky EU project on composite pipes, worth over â‚¬1m. * Metalcraft improved in the second half, with overall revenue growth in the division of 16%. * Crown downsized to limit future losses, resulting in a Â£0.85m impairment to goodwill. * Jena Tec sustained its strong growth curve, 12% overall, notably in Germany and the USA, to record a consistent 11% EBIT margin. * Jena Tec continued to win large contracts, with a Â£0.5m win for Nissan being prominent. Commenting on the results, Roger McDowell, Chairman, said: "For the second year in succession, I am pleased to report that group revenue and adjusted EBITDA have grown by over 20%. Indeed, adjusted EBITDA margin is a respectable 9.5%, with adjusted EPS having more than doubled in the past two years, whilst net debt remains at manageable levels. All of these results were in line with market expectations, so our consistent form continues. While the Board is encouraged by this improved performance, `prediction is very difficult, especially about the future' as Niels Bohr said, so we remain cognisant of the volatile nature of global markets. Some elements of our key markets remain in a state of flux and we have seen this across our group with improvements in Aerospace being offset by stubborn weakness in Energy and Medical. Whilst we remain optimistic, this sentiment is tempered, to ensure that we sustain the shareholder value gains of the last two years. Consequently, as reported at the half year, we are pleased to inform shareholders that our optimism extends to an enhanced final dividend of 1.0 pence per share - above expectations, signalling our clear intent to reward investors in line with our incremental improvements in operating performance." Enquiries: Avingtrans plc tel. 01159 499 020 Roger McDowell, Chairman Steve McQuillan, Chief Executive Officer Stephen King, Chief Financial Officer FinnCap Ltd tel. 020 7220 0500 Marc Young/ Henrik Persson - Corporate Finance Brian Patient / Victoria Bates - Corporate Broking Newgate Threadneedle tel. 020 7653 9850 Josh Royston / Guy McDougall About Avingtrans plc: Avingtrans has become a significant organisation in the design, manufacture and supply of critical components and associated services to global industrial markets from three divisions: aerospace, energy and medical and industrial products. Aerospace Sigma Precision Components Ltd - UK and China Sigma Precision Components is a market leader in rigid and flexible pipe assemblies and components for prestigious aerospace customers such as Rolls Royce, Eaton Corp and Meggitt. Sigma also manufactures precision prismatic components for the aerospace industry from its purpose-built facilities in the UK and Chengdu, China. Sigma Composites Ltd - UK Sigma Composites was acquired in February 2012. The business is an established player in the high tech composite components market for Formula 1 and motorsport. The business is now building a position in composites for civil aerospace. C&H Precision Finishers Ltd - UK C&H provides final polishing and specialist finishing on aeroengine turbine blades, compressor blades and vanes for the power generation industries, operating from two strategically located centres to offer a local service to the UK aerospace industry. Energy and Medical Stainless MetalcraftLtd - UKand China Provider of safety-critical equipment for the energy, medical, science and research communities, worldwide, specialising in precision pressure and vacuum vessels and associated sub-assemblies and systems. Crown International Ltd - UK Designs and manufactures market-leading pole and support systems for roadside signage and safety cameras, rail track signalling and gantries. Industrial products Jena Tec UK, Germany, USA and China From specially equipped factories in Germany and the UK, Jena Tec designs, manufactures and services Precision Ballscrews, Spindles and Linear Motion actuation systems for automation and control of CNC machines and precision instrumentation. Through Moss Group, Jena provides specialist automation products and services. 2012 Preliminary statement Chairman's statement "The future isn't what it used to be", as they say and, at the global level, 2012 has some unsettling features of dÃ©jÃ vu about it. In our businesses, we have seen some signs of slowing and more uncertainty than in the previous year, with civil aerospace being a very notable and important exception in this disordered panorama. Nonetheless, our overall performance in the year was again pleasing, with significant double digit growth in revenue and profit for the second year in succession and we began the new financial year with an order book close to record levels. Moreover, our debt position remains under control and has supported further capex and R&D investment to buttress our growth in all three divisions and particularly in Aerospace. There, if anything, the tier 1 OEMs are concerned about shortages in supply chain capacity and we are prudently responding to this need. Further capex investment at Jena Tec has been targeted at products where we believe we have a significant advantage, whilst at Metalcraft, capex investment has been chiefly driven by the preparation for larger scale MRI component production in China. Appropriate capex investment will continue into the new financial year, where this is warranted by long term contract demands. Energy Infrastructure, Civil Aerospace and Medical Imaging, alongside the global Machine Tools sector, continue to provide the bulk of our revenues. Relationships with customers like Siemens, Rolls Royce and Cummins continue to grow and develop in ways that we expect will lead to further new contracts. Indeed, the year saw noteworthy business wins with, for example, Goodrich, Nissan and Agilent. We are fully committed to the pursuit of deep and lasting customer relationships and we seek more and more to bolster our quality and customer service credentials with enhanced intellectual property development. Most importantly, we are delighted to have been awarded a "Clean Sky" EU funded project to develop composite pipes for civil aircraft use, backed by the major European aerospace OEMs. This project represents a perfect springboard for us to combine our existing capabilities at Sigma with our recently acquired Sigma Composites business. As before, market cycles are likely to be variable in the year to come, with the buoyancy of aerospace being balanced by probable on-going weakness in transport infrastructure. We have now downsized Crown to limit the losses from this business which has resulted in a significant impairment to the Crown goodwill. We expect improving performance from Metalcraft in the new year and the Siemens contract gives us the basis for this improvement. Although Jena Tec could see some market softening in FY13, as global market events unfold, the division has a very strong order book, which we expect to support the result there. As usual, the quality of our customer base gives us confidence that we are well-placed for further growth. Our core businesses are developing product and service offerings that will enhance shareholder value and cement our strategic supply chain relationships with our customers. Coupled with targeted acquisitions, such as the Sigma Composites acquisition earlier this year, these service propositions should gradually prove to be decisive in winning high-margin new business. We believe we are targeting the right growth markets and that we are developing deeper partnerships with the market leaders in those sectors. This strategy allows us to broaden products and services to those customers, which - coupled with our deeper manufacturing and design skills - means we remain alert to any opportunities that arise. Our talented teams have once more shown their passion for excellence in engineering and I thank them wholeheartedly on your behalf for their dedicated efforts and commitment to Avingtrans during this past year. We look forward with relish to the challenges and opportunities ahead. R S McDowell Chairman 11 September 2012 Business Review Group Performance Financial Performance Full year Group revenue increased by 21% to a record Â£44.0m (2011: Â£36.3m). All three divisions saw significant growth, especially Aerospace, being boosted by the civil aerospace market expansion. Output increased in all of the businesses except Crown, where the transport infrastructure market continued to suffer from government inaction across the UK and Europe. Gross margins were largely consistent with the first half, being down slightly to 27% in the period (2011: 29%). Operating profit (adjusted for impairment of goodwill) increased markedly, up by 39% to over Â£2.4m (2011: Â£1.7m). Adjusted EBITDA was further enhanced by 26% to Â£4.2m (2011: Â£3.3m). The effective rate of taxation was 24.3% (2011: 11.3%) predominately due to the use of losses brought forward in the US and research and development tax credits in the UK, offset by one off asset impairments this year which attract no tax relief. Adjusted diluted earnings per share, for the period ending 31 May 2012, was up to 7.5p (2011: 5.5p) based on 26.4m (diluted weighted average) shares, with an increased return on net assets (adjusted for impairment of goodwill) of 7.5% (2011: 5.5%). The cash flow from operations reduced to Â£2.2m in the period (2011: Â£3.0m) due to the increased working capital requirements of the Group's expansion, although the second half cash generation was in line with the previous year. Net indebtedness at year end was better than expectations, at Â£8.4m, up by just Â£0.4m from the half year, but more significantly increased from the prior year end (2011: Â£6.6m), due in part to the Sigma Composites acquisition in February 2012 and financing capex investments. The debt position continues to be wholly asset backed. Balance sheet gearing was unchanged from the half year, up to 36% from 29% at 31 May 2011. Continued investment in the business of Â£3.5m (2011: Â£ 1.3m) demonstrates a proactive approach to capital investment in line with market opportunities, as we sustain our previous growth path. The Board voted to underline our dividend policy and we are pleased to be able to recommend at the AGM an improved final dividend of 1.0 pence per share (2011: 0.4 pence per share). This will be paid on 14 December 2012 to shareholders on the register at 19 October 2012. As before, the Board will proactively review the dividend position, taking account of the on-going changes in the trading position in our markets. The Group has a number of exciting trading opportunities across all of its existing operations and sees further prospects to develop our footprint which should deliver long term growth and shareholder value . The continued backing of our investors, coupled with ongoing supportive relationships with the Group's principal bankers, means we expect to have more than adequate financial resources to continue to invest in the business. We also continue to develop relationships with new and potential stakeholders, assisted by our progressive dividend policy. Strategy Our strategy remains largely unchanged from last year. Avingtrans is a precision engineering group, operating in differentiated, specialist niches in the supply chains of many of the world's best known engineering OEMs, for example: Rolls Royce, Siemens, Cummins, GE, etc. Our core strategy is to build market-leading niche positions in our defined sectors, namely, the aerospace, energy, medical and specialist industrial markets. The three strategic thrusts remain: * Customers: developing our key accounts and partnering or acquiring assets to provide OEMs with integrated product and service offerings, of optimum quality, delivery and value for money. * Channels: developing new channel partners in appropriate new territories and markets, with existing product capabilities * Capabilities: strengthening core group know-how in design and manufacturing, to reduce costs and deepen our value added to our customers. Our core businesses - Metalcraft, Jena Tec and Sigma - have the capability to engineer products in Europe and produce those products partly or wholly in Asia, allowing us to access low cost sourcing at minimum risk, as well as positioning us robustly in the development of the Chinese and Asian markets for our products. Sigma, Metalcraft and Jena Tec are increasingly established in China and Sigma forms an integrated supply chain in the UK and in China, within one business. C&H and Crown continue to be developed from the UK only. We have increased our capability to manage sophisticated outsourced manufacturing programmes for OEMs, thus accessing business of enduring value, with the prospect of higher sales and reduced annual volatility. We remain focused on markets where we can sustain significant competitive long term advantage. Operations Aerospace Division (Sigma and C&H) Sigma and C&H recorded another "best ever" performance, as our capabilities improved and the civil aerospace market remained buoyant. Revenue increased by 34% to Â£17.1m, including Â£0.6m for the recently acquired Sigma Composites business. Sigma China sustained its profit track and grew strongly again - up by 52% in the year. Sigma UK continued to win long term contracts - eg with Goodrich - in the year, which will lead to further growth in due course. C&H continued to grow consistently, with the Rolls Royce relationship developing well across multiple sites in the UK. Civil Aerospace, befittingly, is still gravity defying in global market terms, assisted by long lead times and structurally stable market drivers. Boeing suggested recently that orders may have "peaked", but the long supply chain and our performance improvement programme means that we do not expect to see a peak in our output anytime soon. The recent Farnborough Air Show was very encouraging for us and we were able to introduce Sigma's composite capabilities for the first time, which were well received. Therefore, our order book remains at a record level. Discussions are on-going with both existing and new customers regarding contract extensions and potential further long term agreements, as the strong market conditions continue to trickle down to quality suppliers in the sector. Capital expenditure at Sigma China continued at a prudent pace, as demand is still outstripping our growth capacity. We remain keen to ensure that organisational control keeps pace with output, since any loss of control could be costly in terms of quality and delivery to our customers. Necessary capital spending will continue into the new financial year in China and the UK, with preparations for pipe assembly facilities in China now well underway. Sigma's transition to becoming a world-class strategic supplier for our OEM partners is on-track, with lean manufacturing deployment in line with forecasts and delivered quality heading towards a sustained class leading position. Plans to develop Sigma in the USA are in hand and we remain open-minded about whether an acquisition or an organic development there will prove to be the best option. The acquisition of Sigma Composites in Buckingham in February 2012 gave us the opportunity to build on their existing strength in F1/Motorsport by adding aerospace capabilities to the business. Early results were weaker than anticipated and we made a loss in the post acquisition period, mainly due to service interruptions in Formula 1, which resulted in less business in that sector than historically. However, we have since restored equilibrium in F1 and started to see initial aerospace contracts coming through to this business - ahead of schedule - and the initial results for the new financial year are encouraging. The win of the "Clean Sky" project, announced in our recent Trading Update, is worth over â‚¬1m of grant monies to Sigma and provides the ideal platform for us to build composite pipe manufacturing technology and combine the talents of the existing and new Sigma businesses. C&H once again delivered a strong performance and the relationship with Rolls Royce now extends over several sites in the UK. Having added new service capabilities within the year, we are currently investigating the possibility of adding further capabilities in FY13, which would enable us to expand the scope of our service offering significantly. Both sites continue to operate satisfactorily, though Cheltenham has not grown quite as much as we would have wished. Whilst the relationship with Rolls Royce is important to C&H, we have been able to expand our offerings to other customers also in the year - eg Alstom, for turbine blades. Energy and Medical Division (Metalcraft and Crown) There is no disguising that we were disappointed with the performance of this division in the period. Of course, we were not helped by on-going very weak market conditions in the transport infrastructure segment for Crown. However, the combination of delays to the new MRI system ramp up by Siemens and poor margin mix in project work meant that Metalcraft's results were disappointing. This combination of issues resulted in a marginal profit for the division as a whole, despite good headline revenue growth of 16%, to Â£15.1m. We expect that the new Siemens business will belatedly improve our performance in FY13, as its issues now seem to be being largely resolved. The various market segments for Metalcraft are explained below, as well as more details on the Crown result. Medical: it was a frustrating year for the Metalcraft team in relation to MRI systems, with Siemens' new product being delayed significantly and not contributing to the FY12 result at all. However, as noted above, we expect this situation to be resolved in FY13. Various new customers were developed in the period, with an expansion of MRI vessel sales to Agilent in particular. AllTech Medical Systems in China is continuing to expand and our volumes there should become more material for Metalcraft in the new financial year. Energy: volumes with Cummins have been encouraging overall, as our business with them has expanded. However, we have faced difficulties in this contract, mainly caused by short term volume of demand, which is proving to be stubbornly volatile. There have been a few other modest business gains in the segment in FY12. During the year Metalcraft commenced deliveries to a new customer, Meggitt, for heat exchanger vessels and assemblies, mainly for oil and gas platforms. This relationship is at an early stage, but our initial performance is encouraging and could lead to further business with this customer Nuclear: there has been very little progress in nuclear new build to report in the period and we are reviewing our participation in this potential market. On the other hand, nuclear decommissioning prospects have grown and we largely completed delivery of various projects in the year for Sellafield, Magnox and Costain, to name a few. Looking forward, there are a number of material prospects for Metalcraft in this area with potentially lucrative margins and we are working hard to participate in these. Metalcraft China was held back by the on-going delays at Siemens, which also delayed our local plans, though we expect matters to improve in FY13. However, AMS began to deliver more systems and we expect this trend to continue in 2013. Our operations there were close to break even, as we scaled our efforts accordingly. As reported at the half year, Crown International's lack of immediate prospects drove further cost cutting on our part and the decision to exit two leased facilities in the Bristol area, to leave just one small facility, though we have delayed exit of one of the two facilities for a short time due to some modest recent business wins. Whilst these orders are insufficient to generate significant profits, they are the first material orders that Crown has had for over 18 months and are sufficient to underpin the reduced budget that we implemented this year. Given the poor performance of Crown in FY12, the Board have written off Â£850,000 of the Crown goodwill following an impairment review. Note that this decision has no effect on Group cash or adjusted operating profit for the period. Industrial Products Division (Jena Tec) It was a pleasingly consistent performance by Jena Tec in the second half and for the year as a whole. Orders held up well, despite global uncertainties and the division finished the year with record sales of Â£11.8m, an increase of 12% on the previous period. Equally pleasing was the consistency of the divisional EBIT margin result, which marginally eclipsed that of the previous year, at 11%. Order intake was consistent too and particularly strong in Germany and the USA, where our work on distribution channels and our new Michigan facilities is starting to pay off. In the UK, there were relatively fewer project orders for the Moss automation team, but we finished the year with an important Â£0.5m order from Nissan UK, with the potential for more orders from this customer in the future. The temporary effect produced by the Japanese tsunami of 2011 has now been unwound, though far eastern competitors remain less prominent in Europe than previously. We are seeing some signs of slowing growth, due to global market conditions, but new product variants and our current order book is expected to secure the position for FY13. Appropriate capex investments in all three facilities have strengthened our capabilities and our market offering. This is particularly important in the USA, where our previous inability to modify products locally hampered our development. In Germany, we expanded our capacity in miniature ball-screws, in response to customer demand and continued a slow but steady implementation of lean manufacturing processes that will improve our output at Jena Tec in years to come, Further deliveries to E.ON of our ball-screw actuated safety valve system have cemented this product in our portfolio and we expect to see further orders in this area, though we expect sales growth to be steady, as qualification trials are protracted. We are planning to develop a wider product range in actuation applications and to use our nascent systems strength to provide a basis for bidding on bigger OEM projects. People There have been no changes at Board or top level management in the period. In all three divisions, we continued to strengthen the management teams. Each of the businesses has again added to its base of skilled engineering and technical personnel, with intellectual property development (eg through "Clean Sky") becoming more important now. Skills availability remains challenging, but we do not believe that we will be unduly constrained by skills shortages. The acquisition of Sigma Composites brought new capabilities to the group, which we will build on in the new financial year. In response to our growth, most group businesses increased headcount in the last year, but the output per employee also continued to improve. Outlook As before, the poor outlook for the UK economy is not expected to have a material impact on Group prospects. Predicting the future is no easier than last year and we continue to carefully monitor the economic situation in all markets. Relatively speaking, our biggest sectors - Civil Aerospace, Diagnostic Medical Imaging and Energy Infrastructure - are less sensitive to events in the Eurozone and are more dependent on Asian economic development than other factors. Our consistent strategy has laid strong foundations for the future of our core businesses and is expected to yield further material developments in FY13 that will drive our growth, despite global macroeconomic conditions. Our investment in protected niches within long term structural growth markets enables us to take advantage of new opportunities and new capabilities will increasingly differentiate us from our competition. With the acquisition of the composites business, we have signalled our clear intention to build shareholder value through targeted M&A activity. Although we cannot state that this will result in any further transactions during the current financial period, we will vigorously pursue any option that we believe will enhance long-term value. The Sigma, Metalcraft and Jena Tec brands are all developing well. Stakeholders can now consistently see that the Group is well placed for the long run, with the strength we are developing in China becoming ever more decisive in developing the prospects of the group in the future. We are enthusiastically pushing forward in our quest to become world class strategic suppliers in our chosen fields. Thank you for your support. Roger McDowell Steve McQuillan Stephen King Chairman Chief Executive Officer Chief Financial Officer 11 September 2012 11 September 2012 11 September 2012 Consolidated Income Statement for the year ended 31 May 2012 Note Year to Year to 31 May 31 May 2012 2011 Â£'000 Â£'000 Revenue 1 43,992 36,260 Cost of sales (31,962) (25,609) Gross profit 12,030 10,651 Distribution costs (1,197) (1,209) Administrative expenses (8,238) (7,545) Share based payment expense (47) (28) Impairment of goodwill (850) - Amortisation of intangibles from business (137) (137) combinations Operating profit 1 1,561 1,732 Finance income 2 - Finance costs (328) (310) Profit before taxation 1,235 1,422 Taxation 3 (300) (161) Profit for the financial year attributable 935 1,261 to equity shareholders Earnings per share : Total and continuing operations - Basic 4 3.6p 4.9p - Diluted 4 3.5p 4.9p Consolidated statement of comprehensive income Year to Year to 31 May 31 May 2012 2011 Â£'000 Â£'000 Profit for the year 935 1,261 Other comprehensive income for the year, net of tax Exchange differences on translation of (44) (117) foreign operations Total comprehensive income for the year 891 1,144 attributable to equity shareholders Consolidated Cash Flow Statement for the year ended 31 May 2012 Year to Year to 31 May 31 May 2012 2011 Â£'000 Â£'000 Operating activities Cash flows from operating activities 2,161 2,984 Finance costs paid (329) (310) Income tax paid (258) (37) Net cash inflow from operating activities 1,574 2,637 Investing activities Finance income 2 - Purchase of intangible assets (759) (353) Purchase of property, plant and equipment (2,759) (982) Proceeds from sale of property, plant and 43 72 equipment Net cash used in investing activities (3,473) (1,263) Financing activities Equity dividends paid (104) - Repayments of bank loans (481) (661) Repayments of obligations under finance leases (996) (957) Borrowings raised 1,577 1,071 Net cash outflow from financing activities (4) (547) Net (decrease)/increase in cash and cash (1,903) 827 equivalents Cash and cash equivalents at beginning of year (564) (1,279) Effect of foreign exchange rate changes 114 (112) Cash and cash equivalents at end of year (2,353) (564) Cash generated from operations: for the year ended 31 May 2012 Year to Year to 31 May 2012 31 May 2011 Â£000 Â£000 Continuing operations Profit before income tax 1,235 1,422 Adjustments for: Depreciation 1,248 1,153 Amortisation and impairment of intangible 497 421 assets Profit on disposal of property, plant and (3) (72) equipment Finance income (2) - Finance expenses 328 310 Share based payment charge 47 28 Impairment of available for sale investment 219 - Impairment of goodwill 850 - Changes in working capital Increase in inventories (1,285) (1,121) Increase in trade and other receivables (2,109) (1,384) Increase in trade and other payables 1,129 2,217 Other non cash charges 7 10 Cashflows from operating activities 2,161 2,984 Consolidated Balance Sheet at 31 May 2012 2012 2011 Â£'000 Â£'000 Non current assets Goodwill 9,392 10,242 Other intangible assets 2,574 1,983 Property, plant and equipment 10,954 9,983 Investment property 600 600 Deferred tax 76 39 Available for sale financial assets - 219 23,596 23,066 Current assets Inventories 9,003 7,820 Trade and other receivables 10,940 8,854 Current tax asset 22 122 Cash and cash equivalents 1,849 1,716 21,814 18,512 Total assets 45,410 41,578 Current liabilities Trade and other payables (9,389) (8,310) Obligations under finance leases (994) (871) Borrowings (4,726) (2,754) Current tax liabilities (906) (804) Total current liabilities (16,015) (12,739) Non-current liabilities Borrowings (3,200) (3,139) Obligations under finance leases (1,376) (1,565) Deferred tax (1,127) (1,277) Total non-current liabilities (5,703) (5,981) Total liabilities (21,718) (18,720) Net assets 23,692 22,858 Equity Share capital 1,302 1,274 Share premium account 9,787 9,534 Capital redemption reserve 814 814 Merger reserve 402 402 Translation reserve 467 511 Other reserves 180 180 Investment in own shares (281) - Retained earnings 11,021 10,143 Total equity attributable to equity 23,692 22,858 holders of the parent Consolidated statement of changes in equity at 31 May 2012 Share Share Capital Merger Trans- Other Investment Retained Total capital premium redemp- reserve lation reserves in own earnings account tion reserve shares reserve Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 At 1 June 1,274 9,534 814 402 628 180 - 8,854 21,686 2010 Share-based - - - - - - - 28 28 payments Transactions - - - - - - - 28 28 with owners Profit for - - - - - - - 1,261 1,261 the year Other comprehensive income Exchange rate - - - - (117) - - - (117) loss Total - - - - (117) - - 1,261 1,144 comprehensive income for the year Balance at 31 1,274 9,534 814 402 511 180 - 10,143 22,858 May 2011 At 1 June 1,274 9,534 814 402 511 180 - 10,143 22,858 2011 Ordinary 28 253 - - - - - - 281 shares issued Dividends - - - - - - - (104) (104) paid Investment in - (281) (281) own shares - - - - - - Share-based - - - - - - - 47 47 payments Transactions 28 253 - - - - (281) (57) (57) with owners Profit for - - - - - - - 935 935 the year Other comprehensive income Exchange rate - - - - (44) - - - (44) loss Total - - - - (44) - - 935 891 comprehensive income for the year Balance at 31 1,302 9,787 814 402 467 180 (281) 11,021 23,692 May 2012 Notes to the preliminary statement 31 May 2012 1. Segmental analysis Year ended 31 May 2012 Aerospace Energy and Industrial Unallocated Total Medical Products Central items Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue 17,071 15,082 11,839 - 43,992 Operating profit/ 1,684 (767)* 1,327 (683) 1,561 (loss) Net finance costs (326) Taxation (300) Profit after tax 935 Segment non-current 11,105 8,821 3,582 88 23,696 assets Segment assets 19,738 16,439 8,997 236 45,410 Segment liabilities (9,025) (6,261) (3,066) (3,366) (21,718) Net assets/ 10,713 10,178 5,931 (3,130) 23,692 (liabilities) * - after Â£850,000 impairment of goodwill. Year ended 31 May 2011 Aerospace Energy and Industrial Unallocated Total Medical Products Central items Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue 12,711 12,963 10,586 - 36,260 Operating profit/ 962 206 1,032 (468) 1,732 (loss) Net finance costs (310) Taxation (161) Profit after tax 1,261 Segment non-current 9,699 9,347 3,748 277 23,066 assets Segment assets 16,261 16,575 8,384 358 41,578 Segment liabilities (6,345) (5,364) (3,020) (3,991) (18,720) Net assets/ 9,916 11,211 5,364 (3,633) 22,858 (liabilities) Geographical 2012 2011 2012 2011 Revenue Revenue Non-current Non-current assets assets Â£'000 Â£'000 Â£'000 Â£'000 United Kingdom 33,632 26,721 18,234 18,117 Europe 8,797 8,038 2,571 3,111 North America 2,641 2,318 74 3 Rest of the 1,782 1,366 2,717 1,835 World Eliminations (2,860) (2,183) - - 43,992 36,260 23,596 23,066 The Group has Aerospace revenue of Â£6,381,000 (2011: Â£5,634,000) and Energy & Medical revenue of Â£5,538,000 (2011: Â£5,162,000) with single external customers under common control, which each represent more than 10% of the Group's revenue. 2. Adjusted Earnings before interest, tax, depreciation and amortisation 2012 2011 Â£'000 Â£'000 Profit before tax 1,235 1,422 Share based payment expense 47 28 Impairment of goodwill 850 - Amortisation of intangible assets from business 137 137 combinations Adjusted profit before tax 2,269 1,587 Finance income (2) - Finance cost 328 310 Adjusted Earnings before interest, tax and amortisation (`EBITA') 2,595 1,897 Depreciation 1,248 1,153 Amortisation of other intangible assets 360 284 Adjusted Earnings before interest, tax, depreciation 4,203 3,334 and amortisation (`EBITDA') 3. Taxation 2012 2011 Â£'000 Â£'000 Current tax 487 297 Deferred tax (187) (136) 300 161 4. Earnings per share 2012 2011 No No Weighted average number of shares - basic 25,925,592 25,480,577 Warrant/ Share Option adjustment 453,282 232,427 Weighted average number of shares - diluted 26,378,874 25,713,004 Â£'000 Â£'000 Earnings attributable to shareholders 935 1,261 Share-based payments 47 28 Impairment of goodwill 850 - Amortisation of acquisition related intangibles 137 137 Adjusted earnings attributable to shareholders 1,969 1,426 Basic earnings per share 3.6p 4.9p Adjusted basic earnings per share 7.6p 5.6p Diluted earnings per share 3.5p 4.9p Adjusted diluted earnings per share 7.5p 5.5p 5. Preliminary statement This preliminary statement, which has been agreed with the auditors, was approved by the Board on 11 September 2012. It is not the Group's statutory accounts within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the two years ended 31 May 2012 and 2011 received audit reports which were unqualified and did not contain statements under s498 (2) or (3) of the Companies Act 2006. The statutory accounts for the year ended 31 May 2011 have been delivered to the Registrar of Companies but the 31 May 2012 accounts have not yet been filed. 6. Annual report and Accounts The Report and Accounts for the year ended 31 May 2012 will be available on the Group's website www.avingtrans.plc.uk on or around 26 September 2012. Further copies will be available from the Avingtrans' registered office: Precision House, Derby Road, Sandiacre, Nottingham, NG10 5HU 7. Annual General Meeting The Annual General Meeting of the Group will be held at The Holiday Inn, Bostocks Lane, Sandiacre, Nottingham NG10 5NL at 10.30 a.m. on 24 October 2012.

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