EXOVA Group, the testing specialist subject to a £620 million take-over bid by London’s Element Materials Technology, has received a currency-led boost to first quarter revenue.
Edinburgh-based Exova said total revenue was up two per cent at actual rates between January 1 and April 30, underlining the boost to reported earnings from the weaker pound since the Brexit vote. The company said it had a foreign exchange tailwind of 8.2 per cent arising from its global footprint.
Revenue was down 6.2 per cent on a constant currency basis.
Exova, whose shareholders will vote on the Element takeover offer on June 9, said acqusitions had boosted revenue by 3.7 per cent over the period, adding that it was confident of doing further deals which would deliver growth.
But this was offset by 4.6 per cent revenue fall sparked by disposals.
The company highlighted that it expects to record modest organic revenue growth on a constant currency basis this year, noting that recent actions to reduce costs will offset pressure on margins.
Chief executive Ian El-Mokadem said: “The Group has generally performed as expected in the first four months of 2017. We continue to generate organic growth outside of our oil, gas and industrials sector, albeit to more modest levels than in 2016 as we expected.”
Exova, which has played down the impact on jobs in Scotland from the Element deal, made a series of acquisitions in 2016 in a bid to diversify its oil and gas and industrials division. It completed deals to buy South Yorkshire-based Insight NDT, which provides non-destructive testing and radiographic inspection services, to clients in sectors such as oil and gas and rail, and Jones Environmental Forensics. The latter strengthened its presence in the environmental sector. Before that Exova acquired a majority stake in Admaterials Technologies, a Singapore-based business specialising in testing and certification services for the construction sector.
However it has made disposals too, including the sale of its food, water and pharmaceutical business to life sciences company Eurofins Scientific for £18m. It also sold an environmental testing business in Canada for around £7.5m as it looked to focus resources on favoured markets.
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