- Email: [email protected]
Porvair plc, UK
COMPANY PROFILE
Porvair plc, UK Profile
Porvair is a specialist filtration and environmental technology company with operations in the UK, US, Germany and China, employing about 700 people. The company operates two segments, Metals Filtration and Microfiltration. The former designs and manufactures porous ceramics filters for the filtration of molten metals. The Microfiltration division designs and manufactures a broad range of specialist filtration equipment for aerospace, energy, bioscience, water and industrial applications. !NALYSIS
Porvair had a successful fiscal 2016 setting records for both revenue, up 14.2% on the year prior at £109.4 million, and profit before tax, which finished 9.8% stronger at £10.1 million. The company’s Metals Filtration division posted record sales of £34.7 million, up 11.9% on the 2015 comparator. Sales benefited from favourable currency movements, with constant currency revenue for the year up a more modest 1%. Achievements for the year included record sales of its aluminium and Selee CSX filters, as well as sales growth in China of 89%. In contrast to the sales gains, operating profit in the division fell 12% on the year before to £2.2 million. This was attributed to a second year of planned losses in the company’s Chinese start-up where commissioning of its aluminium filter production line was completed. These costs are expected to diminish in 2017 as the plant builds revenue and investments in staff and training start to take effect. Porvair’s Microfiltration division had a strong year registering records for revenue and profit. The former rose 15.1% to £74.6 million, with sales up 11% in constant currencies. Successes for the year included record revenues for both its aviation filtration and Seal Analytical operations, while nuclear and bioscience filtration also performed well. Aviation revenues were up 21% on the 2015 comparator with orders for new programmes including the Airbus NEO, Airbus A350, Boeing 777X, Bombardier C Series and Mitsubishi MRJ starting to come through. Seal Analytical revenues were up 17% on the year prior, 6% in constant currencies, on the back of two new platform launches and three product upgrades. Operating profit in the Microfiltration division was up 21.6% on the 2015 figure at £11.8 million. The segment also undertook Porvair’s single acquisition of the year with the December 2015 purchase of the microelectronics company TEM Filter for US$5.2 million. Porvair’s investment during the year also included new facilities for its US industrial filtration operations and capacity expansions at its three UK plants. Key Figures (£ million) 0ORVAIR PLC
COMMENT Porvair’s strategy continues to be based around the development of its specialist filtration and associated environmental technology businesses. Its areas of focus typically share a number of key characteristics, namely: specialist design or engineering skills; product use and replacement mandated by regulation; links to a quality accreditation or maintenance cycle; and, products that are often designed into a specification that typically have long life cycles. Porvair is focusing on four markets where it believes there is long term growth potential - aviation; energy and industrial; laboratory supplies; and, molten metals. Its approach to geography follows its market strategy, with the company establishing a presence where end-markets require. Currently, 46% of Porvair’s revenue comes from the Americas, where aviation and metals filtration are strong and a further 24% from Asia, where sales into water analysis markets are growing and demand for gasification plants is strong. The company also continues to prioritise new product development in order to generate growth rates in excess of the underlying market. It aims to build robust intellectual property around its product developments, with about 30% of its current revenues derived from patent protected products. In 2017 new products are planned for introduction in aviation, nuclear filtration and by Seal Analytical. These include a new inerting filter for commercial aviation and a HEPA filter certified for use in nuclear air and gas treatment. ■
9EAR ENDED 2016 2015 2014
2013
2012
109.4
95.8
104.0
84.3
76.5
34.7 74.6
31.0 64.8
30.1 73.9
28.5 55.8
28.0 48.5
Cost of Sales
73.4
63.5
74.2
55.5
51.2
Gross Profit
36.0
32.4
29.8
28.7
25.2
Operating Profit/(Loss) Of Which: Metals Filtration Microfiltration
10.7
9.8
9.2
8.6
7.2
2.2 11.8
2.4 9.7
2.6 8.7
2.4 8.6
2.4 6.7
Profit before Income Tax
10.1
9.2
8.4
7.8
6.3
7.7
7.0
6.3
5.5
4.3
Turnover Of Which: Metals Filtration Microfiltration
Profit for the Year Contact Details
Chief Executive: Chair: Address:
May 2017
Ben Stocks Charles Matthews 7 Regis Place, Bergen Way Kings Lynn PE30 2JN, UK
Tel: +44 1553 765500 Web: www.porvair.com
Filtration Industry Analyst
7
Porvair plc, UK Profile
Porvair is a specialist filtration and environmental technology company with operations in the UK, US, Germany and China, employing about 700 people. The company operates two segments, Metals Filtration and Microfiltration. The former designs and manufactures porous ceramics filters for the filtration of molten metals. The Microfiltration division designs and manufactures a broad range of specialist filtration equipment for aerospace, energy, bioscience, water and industrial applications. !NALYSIS
Porvair had a successful fiscal 2016 setting records for both revenue, up 14.2% on the year prior at £109.4 million, and profit before tax, which finished 9.8% stronger at £10.1 million. The company’s Metals Filtration division posted record sales of £34.7 million, up 11.9% on the 2015 comparator. Sales benefited from favourable currency movements, with constant currency revenue for the year up a more modest 1%. Achievements for the year included record sales of its aluminium and Selee CSX filters, as well as sales growth in China of 89%. In contrast to the sales gains, operating profit in the division fell 12% on the year before to £2.2 million. This was attributed to a second year of planned losses in the company’s Chinese start-up where commissioning of its aluminium filter production line was completed. These costs are expected to diminish in 2017 as the plant builds revenue and investments in staff and training start to take effect. Porvair’s Microfiltration division had a strong year registering records for revenue and profit. The former rose 15.1% to £74.6 million, with sales up 11% in constant currencies. Successes for the year included record revenues for both its aviation filtration and Seal Analytical operations, while nuclear and bioscience filtration also performed well. Aviation revenues were up 21% on the 2015 comparator with orders for new programmes including the Airbus NEO, Airbus A350, Boeing 777X, Bombardier C Series and Mitsubishi MRJ starting to come through. Seal Analytical revenues were up 17% on the year prior, 6% in constant currencies, on the back of two new platform launches and three product upgrades. Operating profit in the Microfiltration division was up 21.6% on the 2015 figure at £11.8 million. The segment also undertook Porvair’s single acquisition of the year with the December 2015 purchase of the microelectronics company TEM Filter for US$5.2 million. Porvair’s investment during the year also included new facilities for its US industrial filtration operations and capacity expansions at its three UK plants. Key Figures (£ million) 0ORVAIR PLC
COMMENT Porvair’s strategy continues to be based around the development of its specialist filtration and associated environmental technology businesses. Its areas of focus typically share a number of key characteristics, namely: specialist design or engineering skills; product use and replacement mandated by regulation; links to a quality accreditation or maintenance cycle; and, products that are often designed into a specification that typically have long life cycles. Porvair is focusing on four markets where it believes there is long term growth potential - aviation; energy and industrial; laboratory supplies; and, molten metals. Its approach to geography follows its market strategy, with the company establishing a presence where end-markets require. Currently, 46% of Porvair’s revenue comes from the Americas, where aviation and metals filtration are strong and a further 24% from Asia, where sales into water analysis markets are growing and demand for gasification plants is strong. The company also continues to prioritise new product development in order to generate growth rates in excess of the underlying market. It aims to build robust intellectual property around its product developments, with about 30% of its current revenues derived from patent protected products. In 2017 new products are planned for introduction in aviation, nuclear filtration and by Seal Analytical. These include a new inerting filter for commercial aviation and a HEPA filter certified for use in nuclear air and gas treatment. ■
9EAR ENDED 2016 2015 2014
2013
2012
109.4
95.8
104.0
84.3
76.5
34.7 74.6
31.0 64.8
30.1 73.9
28.5 55.8
28.0 48.5
Cost of Sales
73.4
63.5
74.2
55.5
51.2
Gross Profit
36.0
32.4
29.8
28.7
25.2
Operating Profit/(Loss) Of Which: Metals Filtration Microfiltration
10.7
9.8
9.2
8.6
7.2
2.2 11.8
2.4 9.7
2.6 8.7
2.4 8.6
2.4 6.7
Profit before Income Tax
10.1
9.2
8.4
7.8
6.3
7.7
7.0
6.3
5.5
4.3
Turnover Of Which: Metals Filtration Microfiltration
Profit for the Year Contact Details
Chief Executive: Chair: Address:
May 2017
Ben Stocks Charles Matthews 7 Regis Place, Bergen Way Kings Lynn PE30 2JN, UK
Tel: +44 1553 765500 Web: www.porvair.com
Filtration Industry Analyst
7