Avingtrans has reported FY17 numbers a little ahead of our forecasts, for its last period before the acquisition of Hayward Tyler Group (HTG) on 31st August. The enlarged group has good opportunities for sales growth and margin enhancement, leveraging its broader product offer and specialised expertise in its niche engineering markets of Energy and Medical. This should help deliver another cycle of value creation from Avingtrans’ successful buy, build and sell strategy. We have increased our adjusted PBT forecasts by 73% to £2.1m for FY18 and set our FY19 forecasts at £3.4m, based on deliberately cautious assumptions for HTG due to its recent trading difficulties. Despite these assumptions, our forecasts put the group on a FY19 EV/EBITDA multiple which is only in line with the UK peer group. This suggests potential for significant outperformance driven by forecast upgrades and a re-rating.
