Porvair PLC - Full Year Results

Operating review

2025 was a year of record revenue, profit and margin, achieved despite variable demand patterns across our end markets. The Group reported 1% revenue growth (2% constant currency). Adjusted operating profit was 7% ahead of the prior year with an operating margin of 13.5%, an 80 bps improvement from 2024, with margin progress across all three divisions. Cash generation was strong, with closing cash of approximately £23m at 30 November 2025, after investing £7.7m in capital expenditure.

Trading was mixed across our end markets. As expected, we experienced stronger aerospace demand in the second half of the year, following a slower first six months. Industrial demand was mixed, with nuclear sales growing, while petrochemical sales, which can be lumpy, had a stronger first half than second. The end market for aluminium and superalloys continued to show progress, while the auto, truck and agriculture end markets, which represent a smaller part of the Group, was lower. The laboratory end markets showed steady growth, with the environmental market improving.

Porvair serves a range of markets in different parts of the world and trading can be affected by both local and global events, such as the changing tariff landscape during 2025. The Group's manufacturing footprint mainly serves local customers. Despite variation in the end markets in a particular year, Porvair benefits from underlying growth trends that have not changed. Our decentralised management structure is helpful in volatile trading conditions, enabling key commercial decisions to be made closer to customers and suppliers. The benefit of the Group's diverse operating spread is shown in the consistent long-term track record, despite inconsistent demand across end markets.

Since joining the Group, I have visited all our locations and spent time with our highly talented global teams over the year. We have implemented various changes to the way the team works together. In order to enhance our execution and increase momentum, we have formed an Executive Committee responsible for the management of the Group, consisting of the Executive Directors and key members of the senior leadership team. We also added a central resource during the year to support M&A activities and proactively manage the pipeline.

During the year, we reviewed the strategy and business model, continuing to build on the many strengths of the Group, while further accelerating momentum to deliver long-term value. This covers the approach to market, capital allocation priorities, innovation, operational performance, and, underpinning all of what we do, continuing to invest in our people and talent development across the business. I am confident that Porvair is well-placed to deliver sustainable growth for stakeholders.  

Track record

Porvair's performance has remained relatively consistent over many years and the Group's track record for growth, cash generation and investment is:

This longer-term growth record gives the Board confidence in the Group's capabilities and is the basis for capital allocation and planning decisions.

Strategy and business model

Porvair's strategic purpose is the development of specialist filtration, laboratory and environmental technology businesses for the benefit of all stakeholders. Principal measures of success include consistent earnings growth and selected ESG measures. During the year, the strategy has been reviewed, continuing to build on the many strengths of the Group, while further accelerating momentum to deliver long-term value. This covers the approach to market, capital allocation priorities, innovation, operational performance, and, underpinning all of what we do, continuing to invest in our people and talent development across the business. Porvair will host a capital markets event in the second half of the year to provide more detail.

The Group is positioned to benefit from global trends as outlined above.

Porvair businesses have certain key characteristics in common:

·      specialist design, engineering or commercial skills are required;

·      product use and replacement is mandated by regulation, quality accreditation or a maintenance cycle; and

·      products are typically designed into a system that will have a long life-cycle and must perform to a given specification.

Orders are won by offering the best technical solutions or commercial service at an acceptable cost. Technical expertise is necessary in all markets served. New products are often adaptations of existing designs with attributes validated in our own test and measurement laboratories. Experience in specific markets and applications is valuable in building customer confidence. Domain knowledge is important, as is deciding where to direct resources.

This leads the Group to:

·      focus on markets with long-term growth potential;

·      look for applications where product use is mandated and replacement demand is regular;

·      make new product development a core business activity;

·      establish geographic presence where end-markets require; and

·      invest in both organic and inorganic growth.

Therefore:

·      Porvair focuses on three operating divisions: Aerospace & Industrial; Laboratory; and Metal Melt Quality. All have clear long-term growth drivers;

·      our products typically reduce emissions or protect complex downstream systems and, as a result, are replaced regularly. A high proportion of our annual revenue is from repeat orders;

·      through a focus on new product development, we aim to generate growth rates in excess of the underlying market through cycle. Where possible, we build intellectual property around our product developments;

·      our geographic presence follows the markets we serve. In the last twelve months: 44% of revenue was in the Americas; 27% in Continental Europe; 16% in Asia; 11% in the UK; and 2% in Africa. The Group has plants in the US, UK, Belgium, Germany, Hungary, the Netherlands, India and China. In the last twelve months: 45% of revenue was manufactured in the US; 26% in the UK; 25% in Continental Europe; and 4% in Asia; and

·      we aim to meet dividend and investment needs from free cash flow and modest borrowing facilities.

Environmental, Social and Governance ("ESG")

The Board understands that responsible business development is essential for creating long-term value for stakeholders. Most of the products made by Porvair are used to the benefit of the environment. Our water analysis equipment measures contamination levels in water. Industrial filters are typically needed to reduce emissions or improve efficiency. Aerospace filters improve safety and reliability. Nuclear filters confine fissile materials. Metal Melt Quality filters reduce waste and help improve the strength-to-weight ratio of metal components. 

Divisional review

Aerospace & Industrial

* See notes 1 and 2 for definitions and reconciliations.

The Aerospace & Industrial division designs and manufactures a wide range of specialist filtration products, demand for which is driven by customers seeking better engineered, cleaner, safer or more efficient operations. Differentiation is achieved through design engineering; the development of intellectual property; quality accreditations; and customer service. The division operates from sites in the UK, US, the Netherlands, Belgium and India, and its sales are global.

Revenue in the year declined by 1% (flat on constant currency). Aerospace revenue grew by 4% for the full year, despite being 8% lower in the first half. Petrochemical sales, which can be lumpy, were 6% lower compared with a strong comparator last year. The European petrochemical market is expected to remain subdued in 2026. EFC, which was acquired in December 2023, continues to perform well. Weakness in the general US industrial market continued but nuclear demand improved in the second half of the year, finishing 8% up over prior year. Gasification revenue, which is project related, was down on prior year.  Adjusted operating profit showed 1% growth over prior year and was impacted by product mix.

Laboratory

* See notes 1 and 2 for definitions and reconciliations.

The Laboratory division has two operating businesses: Porvair Life Sciences (including Porvair Sciences, Finneran, Kbiosystems and Ratiolab) and Seal Analytical. The division operates from sites in the UK, US, Germany, Hungary, the Netherlands and China, and its sales are global.

·      Porvair Life Sciences manufactures laboratory filters, small instruments and associated consumables, for which demand is driven by sample preparation in analytical laboratories. Differentiation is achieved through proprietary manufacturing capabilities; control of filtration media; and customer service.

·      Seal Analytical supplies instruments and consumables to environmental laboratories, for which demand is driven by water quality regulations. Differentiation is achieved through consistent new product development focused on improving detection limits and improving laboratory automation.

Revenue growth of 4% (5% on constant currency) was driven by steady progress across the end markets, with the environmental end market growing 9% over prior year. Several new product developments in Seal Analytical, Porvair Sciences and Kbiosystems were launched during the year, with good early interest from the market, which should be promising for the coming year and beyond. The adjusted operating profit grew 15%, with a 150bps improvement in operating margin, driven by improved operational focus and continued investment in automation and capacity across the businesses.

Metal Melt Quality

* See notes 1 and 2 for definitions and reconciliations.

The Metal Melt Quality division manufactures filters for molten aluminium, ductile iron and nickel-cobalt alloys. It has a well-differentiated product range based on patented products and extensive experience in melt quality assessment. Following the acquisition of Drache in January 2026, the division operates from sites in the US, Germany and China, and its sales are global.

Revenue declined 1% (1% up on constant currency), while adjusted operating profit increased by 12%. Demand within the auto, truck and agriculture end markets, which represent a smaller part of the Group, was lower, although sales picked up in the second half of the year. This reduction was partially offset by increased aluminium cast house demand and strong demand for superalloys. The operations in China continued to improve in a year affected by increased geopolitical uncertainty and the current tariff environment, and delivered modest profit growth on prior year.

The £5.5m investment in the Group's aluminium cast house production capabilities in Hendersonville is progressing to plan and remains on track to complete in the first half of 2026. These assets require replacement on a 20-25 year cycle and will increase capacity, lower unit costs and reduce carbon emissions.

On 12 January 2026, the Group announced the acquisition of Drache. Founded in 1984, Drache is a molten metal filtration business in Diez, Germany. This acquisition is a strong strategic fit with our Metal Melt Quality division, bringing complementary products and engineering experience, while expanding the divisions global reach with a new European base alongside its American and Asian operations. Drache's unaudited 2025 revenue is expected to be approximately €20m.

These investments will position the Group well to benefit from growing global demand for aluminium filtration. This global growth trend is underpinned by the infinite recyclability of aluminium; its strength-to-weight benefits for use in transportation; the replacement of plastic and steel with aluminium; and the energy efficiency of cast house recycling compared to primary production.

Dividends

The Board is recommending a final dividend of 4.5 pence per share, at a value of £2.1m (2024: 4.2 pence per share, at a value of £1.9m). The full year dividend increases by 6% to 6.7 pence per share, a value of £3.1m (2024: 6.3 pence per share, a value of £2.9m).

Current trading and outlook

Porvair delivered record revenue, profit and margin in 2025, despite mixed trading conditions across our end markets. As expected, aerospace demand increased in the second half of the year, while petrochemical sales slowed, and industrials remained mixed. The laboratory end markets showed steady progress throughout the year, with environmental demand continuing to improve. Overall, the Group delivered another year of progress despite economic uncertainty and end-market inconsistency. This performance demonstrates the resilience and quality of our business, together with agility in managing near-term macro-economic uncertainty.

The Group's long-term fundamental demand drivers have not changed and Porvair remains well positioned to take advantage of tightening environmental regulation; the growth of analytical science; the need for clean water; the development of carbon-efficient transportation; the replacement of plastic and steel by aluminium; and the drive for manufacturing process quality and efficiency. It is these trends, and Porvair's business model, that have driven the Group's consistent longer-term track record.

In the near-term there is much to look forward to in 2026, including welcoming the team at Drache to the Group; continuing to drive operational performance; new product introductions in aerospace, Seal Analytical and Porvair Life Sciences; the installation of our new manufacturing line for aluminium filtration; and industrial demand recovery. The Board remains committed to a strategy of organic and inorganic growth and is optimistic about the future.

Hooman Caman Javvi

Group Chief Executive

Financial review

Group results

Revenue was 1% higher on a reported currency basis and 2% higher at constant currency (see note 1). Operating profit was £24.5m (2024: £22.8m) and profit before tax was £23.3m (2024: £20.9m). Profit after tax was £18.2m (2024: £16.6m). An operating review, together with a review of divisional performance, is included in the Operating review above.

Alternative performance measures - Group profit

The Group presents alternative performance measures to support the understanding of its trading performance (see note 1).

Adjusted profit excludes £1.6m (2024: £1.7m) for the amortisation of acquired intangible assets and £0.1m (2024: £nil) for costs incurred in relation to the acquisition of the 100% share capital of Drache Umwelttechnik GmbH, which completed after the reporting date on 12 January 2026:

Impact of exchange rate movements on performance

The international nature of the Group's business means that relative movements in exchange rates can affect reported performance. The rates used for translating the results of overseas operations were:

During the year, the Group experienced a £2.4m (2024: £4.2m) year-on-year reduction in revenue from the net movement in the exchange rates used to retranslate the results of overseas operations (note 1) and a £1.1m loss on the retranslation of overseas net assets (2024: £1.6m).

During the year, the Group sold US$24.9m (2024: US$29.8m) at a net rate of US$1.29:£1 (2024: US$1.26:£1) and sold €7.7m (2024: purchased €3.8m) at a net rate of €1.17:£1 (2024: €1.20:£1). At 30 November 2025, the Group had US$3.0m (2024: US$4.0m) of outstanding forward foreign exchange contracts; hedge accounting has not been applied to these contracts.

Net finance costs

Net finance costs comprise interest income on deposits, interest on borrowings, lease liabilities, and the Group's retirement benefit obligations, together with the cost of unwinding discounts on provisions. The Group also incurs undrawn commitment fees on the Group's available banking facilities. Net finance costs of £1.2m (2024: £1.9m) decreased in the year following the repayment of borrowings in the prior year. Interest cover from operating profit was 21 times (2024: 12 times). Interest cover from operating profit on net bank finance costs only was 156 times (2024: 33 times).

Tax

The total Group tax charge for the year was £5.1m (2024: £4.3m), including the tax effect of the adjusting items set out in note 1. The adjusted tax charge was £5.5m (2024: £4.8m), with the effective rate of income tax on adjusted profit before tax at 22% (2024: 21%).

The Group has current tax provisions of £0.2m (2024: £1.6m), which includes £0.8m (2024: £0.9m) for uncertainties relating to the interpretation of tax legislation in the Group's operating territories, offset by payments on account and amounts recoverable for overpayments of tax.

The Group carries a deferred tax asset of £nil (2024: £0.1m) and a deferred tax liability of £4.9m (2024: £3.7m). Deferred tax assets relate principally to retirement benefit obligations and share-based payments. The deferred tax liability relates to accelerated capital allowances, acquired intangible assets arising on consolidation and other timing differences.

Cash flow, cash and net debt

The table below summarises the cash flow for the year:

Cash generation is central to the Group's business model. Cash generated from operations was £29.2m (2024: £25.7m). Working capital increased by £1.6m (2024: £3.8m) and remained at 17% of revenue (2024: 17%). 

Capital expenditure on property, plant and equipment was £7.7m (2024: £5.1m), with the Group continuing to invest in a range of capital projects across all three divisions with an emphasis on automation, productivity and capacity. The £5.5m capital investment for the update and expansion of the Group's aluminium cast house production capabilities in Hendersonville, US, is progressing to plan, with a further £3.0m spent during the year (2024: £1.0m). The project remains on track and is expected to complete in the first half of 2026.

The Group started the year with cash and cash equivalents of £13.7m and finished the year with £22.9m, having invested £7.7m in capital expenditure (2024: £5.1m). 

Bank borrowings at 30 November 2025 were £nil (2024: £nil). As at 30 November 2025, the Group had €20.0m/£17.5m (2024: €19.6m/£16.3m) of unused credit facilities and an unutilised £2.5m (2024: £2.5m) net overdraft facility.  

Return on capital employed

The Group's return on capital employed was 14.4% (2024: 14.6%). Excluding the impact of goodwill, acquired intangible assets and retirement benefit obligations, the return on operating capital employed was 34.5% (2024: 36.0%).

Retirement benefit obligations

Retirement benefit obligations measured in accordance with IAS 19 Employee Benefits were £3.3m (2024: £5.9m). The Group supports its defined benefit pension scheme in the UK ("the Plan"), which is closed to new entrants, and provides access to defined contribution schemes for its other employees. The Plan's liabilities decreased in the year to £29.7m (2024: £31.3m), whilst Plan assets increased to £26.5m (2024: £25.5m). Following a change in financial and demographic assumptions, a net of tax actuarial gain of £0.5m (2024: loss £0.1m) was recognised within the statement of comprehensive income. Cash contributions paid to the Plan were £2.6m (2024: £2.6m), which included a deficit recovery payment of £2.1m (2024: £2.1m).

The Plan's triennial actuarial valuation was completed in the year based on the position at 31 March 2024.  Following the valuation, the Group agreed to maintain deficit recovery payments of £2.1m per annum. This funding position will be reviewed once again, in line with standard procedures, at the time of the 31 March 2027 triennial actuarial.  

Total equity

Total equity at 30 November 2025 was £167.7m (2024: £153.3m), an increase of 9% over the prior year. The net increase in total equity includes profit after tax of £18.2m (2024: £16.6m), a net of tax actuarial gain of £0.5m (2024: loss £0.1m), together with the £1.1m exchange loss (2024: £1.6m) on the retranslation of foreign subsidiaries.

Events after the reporting date

On 12 January 2026, the Group acquired 100% of the share capital of Drache Umwelttechnik GmbH on a cash free, debt free basis and subject to an agreed level of working capital. Cash consideration of £17.8m was paid in January 2026.

Further detail is provided in note 7.

Finance and treasury policy

The treasury function at Porvair is managed centrally, under Board supervision. It seeks to limit the Group's trading exposure to currency movements. The Group does not hedge against the impact of exchange rate movements on the translation of profits and losses of overseas operations. The Group finances its operations through share capital, retained profits and, when required, bank borrowings. It has adequate facilities to finance its current operations and capital plans for the foreseeable future.

James Mills

Group Finance Director

Consolidated income statement

For the year ended 30 November

Consolidated statement of comprehensive income

For the year ended 30 November

Consolidated balance sheet

As at 30 November

Consolidated cash flow statement

For the year ended 30 November

Reconciliation of net cash flow to movement in net cash/(debt)

Consolidated statement of changes in equity

For the year ended 30 November

Notes

1.         Alternative performance measures

Alternative performance measures are used by the Directors and management to monitor business performance internally and exclude certain cash and non-cash items to reflect a more consistent measure of underlying trading performance. The Directors believe that disclosing such non-IFRS measures enables a reader to isolate and evaluate the impact of such items on results and allows for a fuller understanding of performance from year-to-year. Alternative performance measures may not be directly comparable with other similarly titled measures used by other companies.

Alternative revenue measures

Revenue at constant currency is derived from translating overseas subsidiaries results at fixed constant exchange rates. In 2025 and 2024, the rates used were US$1.40:£1 and €1.20:£1, compared with reported rates of US$1.31:£1 (2024: US$1.28:£1) and €1.17:£1 (2024: €1.18:£1).

Alternative profit measures

A reconciliation of the Group's adjusted performance measures to the reported IFRS measures is presented below:

An analysis of adjusting items is given below:

Adjusted operating profit excludes:

·      the amortisation of intangible assets arising on acquisition of businesses of £1.6m (2024: £1.7m); and

·      other acquisition-related costs of £0.1m (2024: £nil) incurred in relation to the acquisition of the 100% share capital of Drache Umwelttechnik GmbH acquired in January 2026. Further details are disclosed in note 7. 

Adjusted earnings before interest; tax; depreciation; and amortisation of intangible assets ("EBITDA")

The Group's adjusted EBITDA is determined as follows:

Return on capital employed

The Group uses two return measures to assess the return it makes on its investments: 

·      adjusted post tax return on capital employed of 14.4% (2024: 14.6%) is the tax adjusted operating profit as a percentage of the average capital employed. Capital employed is the average of the opening and closing Group net assets less the average of the opening and closing cash and cash equivalents, and borrowings; and

·      adjusted post tax return on operating capital employed of 34.5% (2024: 36.0%) is calculated on the same basis except that the capital employed is adjusted to remove the average of the opening and closing goodwill; the average of opening and closing acquired intangible assets (net of deferred tax); and the opening and closing retirement benefit obligations (net of deferred tax) to give a measure of the operating capital.

2.         Segment information

The chief operating decision maker has been identified as the Board of Directors. The Board of Directors has instructed the Group's internal reporting to be based around differences in products and services, in order to assess performance and allocate resources. The key profit measure used to assess the performance of each reportable segment is adjusted operating profit/(loss). Management has determined the operating segments based on this reporting.

As at 30 November 2025, the Group is organised on a worldwide basis into three operating segments:

1)   Aerospace & Industrial - principally serving the aviation, and energy and industrial markets;

2)   Laboratory - principally serving the bioscience and environmental laboratory instrument and consumables market; and

3)   Metal Melt Quality - principally serving the global aluminium, iron foundry and superalloys markets.

Other Group operations' costs, assets and liabilities are included in the "Central" division. Central costs mainly comprise Group corporate costs, including new business development costs, some research and development costs and general financial costs. Central assets and liabilities mainly comprise Group retirement benefit obligations, tax assets and liabilities, cash and cash equivalents, and borrowings.  

The segment results for the year ended 30 November 2025 are as follows:

The segment results for the year ended 30 November 2024 are as follows:

The segment assets and liabilities at 30 November 2025 are as follows: