The Group has issued an in-line trading update for the first half of the current financial year and confirmed period end net cash (pre-IFRS 16) of £22.5m. Avingtrans has also announced that it has increased its shareholding in Adaptix to 11.9% at a cost of £1.5m. Adaptix and Magnetica have product launch plans that are convergent and there is clear benefit in the companies working in close collaboration as they bring about a transformation in (small-scale) diagnostic imaging. The funds are to be deployed in developing commercial distribution for Adaptix’s veterinary and orthopaedic 3D X-ray products that will also be used subsequently to distribute Magnetica’s MRI products. Market response to the launch of the Adaptix system is noted as very encouraging. We continue to see clear opportunity in Avingtrans’ Medical division for substantial value creation. The last year has also seen continued progress in the implementation of management’s ‘Pinpoint-Invest-Exit’ strategy that was most clearly evidenced by the accretive disposal of Peter Brotherhood and, alongside strong growth reported in FY21, the share price has significantly outperformed. We now introduce a Buy recommendation and 510p PT.
