Avingtrans PLC (AIM:AVG) CEO Steve McQuillan and CFO Stephen King speak to Thomas Warner from Proactive London after the engineering company released its preliminary results for the year to 31 May 2023.
McQuillan gives a brief overview of the company's unique way of doing business, which combines engineering with elements of the private equity model. He highlights that Avingtrans specialises in serving highly regulated markets such as nuclear, defence, aerospace, and medical. Their business approach, termed "Pinpoint, Invest, Exit," involves identifying struggling engineering businesses, acquiring them, revamping their operations, and subsequently selling them.
King reports a revenue increase of 17.5% for the year ending May 31, 2023, which he suggests "beat city expectations again". The company also held £13 million in cash reserves at the end of the period, enabling it to undertake potential future acquisitions and investments.
McQuillan says he was pleased with the resilience of the business during a year blighted by challenging conditions in the market. He also adds that the market is undervaluing the medical side of the business.
Looking to the future, he suggests its more likely that Avingtrans will be divesting businesses over the next few years rather than acquiring any major new ones, not least because its still "digesting" two relatively recent acquisitions.