Avingtrans’ H1 trading update has confirmed good progress in the period, with all key financial indicators in line with management expectations. Market conditions are improving and the group has won c.£7m of new contracts. The integration of Hayward Tyler Group (HTG) is proceeding to plan, with improvements in profitability underway. Initial cost savings are being delivered as anticipated as a result of the now completed restructuring. Meanwhile long-term banking facilities have been renewed at better terms. Supply chain savings and cross-selling provide further opportunities to drive long-term profitable growth. Management has reiterated expectations for FY18 and we have made no changes to our forecasts at this stage, although we note the potential for future EPS upgrades due to recent changes in US tax legislation. The shares offer good value, trading on a c.30% EV/EBITDA discount to the sector.
