Porvair H1 2026 Earnings Report

Porvair EPS Results

• Actual EPS: GBX 22.10
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Porvair Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Porvair Announcement Details

• Quarter: H1 2026
• Date: 6/29/2026
• Time: Before Market Opens
• Conference Call Date: Monday, June 29, 2026
• Conference Call Time: 4:30AM ET

Porvair (LON:PRV) engages in the filtration, laboratory, and environmental technology business. It operates through three segments: Aerospace & Industrial, Laboratory, and Metal Melt Quality. The Aerospace & Industrial segment designs and manufactures a range of specialist filtration equipment for aerospace, energy, and industrial applications. The Laboratory segment is involved in the design and manufacture of instruments and consumables for use in environmental and bioscience laboratories with a focus on water analysis instruments, diagnostics, and sample preparation equipment. This segment also produces a range of laboratory microplates, filters, tubing, pipette tips, and associated consumables for use in diagnostics, sample preparation and chromatography applications. The Metal Melt Quality segment designs and manufactures porous ceramic filters for the filtration of molten metals. This segment also provides patent protected filters for the aluminum cast house industry; and the filtration of gray and ductile iron, as well as filtration of superalloys used in the manufacture of turbine blades. The company is also involved in trading activities. It operates in the United Kingdom, Continental Europe, South America, the United States, Asia, and Africa, as well as other NAFTA countries. The company was incorporated in 1982 and is based in King's Lynn, the United Kingdom.

Porvair H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Porvair reported record first-half revenue and profit, with revenue up 9% to GBP 106.2 million, operating profit up 10%, and adjusted EPS up 11%. This was the first time half-year revenue exceeded GBP 100 million.
• Neutral Sentiment: Organic constant-currency growth was 2% excluding Drache, as strong aerospace, nuclear, aluminum, and life sciences demand was partly offset by a GBP 7 million decline in petrochemicals. Management expects European petrochemicals to stay subdued through the rest of the year.
• Positive Sentiment: The Drache acquisition is integrating ahead of expectations, with trading described as ahead of plan and margins already within the division’s corridor after just a few months. Management said the deal is a strong fit for the Metal Melt Quality division and supports long-term aluminum growth.
• Positive Sentiment: Porvair completed or agreed three complementary acquisitions this year for about GBP 25 million in total: Drache, GV Filtri, and Carekem. Management sees these deals as expanding capabilities, cross-selling opportunities, and market reach across all three divisions.
• Neutral Sentiment: The company ended the period with a net cash position of GBP 7 million after investing GBP 21.2 million in capex and acquisitions, while still raising the interim dividend by 9%. Full-year expectations remain unchanged before the part-year contribution from GV Filtri and Carekem.

Presentation

[Hooman Caman Javvi, CEO at Porvair]

Good morning, everyone, and welcome to Porvair's interim results presentation. I will start with a summary of the highlights for the period, and then hand over to James to cover the financials and the divisional performance. I will then give an update on our priorities, progress made on M&A, and finish with the outlook for the year before opening up for questions. Let's start with the highlights for the first half. It's been a busy six months for us, with a lot of momentum and good activity going on across the group. We've made strong progress against our near-term priorities we outlined as part of our full-year results announcement in February, building on the platform to set the business up for the future. We are continuing to execute at pace and drive performance across the business, underpinned by disciplined capital allocation.

[Hooman Caman Javvi, CEO at Porvair]

This includes several initiatives to drive margin improvement and profitable growth, which I will come back to. The integration of Drache, which we completed in January, is progressing to plan, and the business is trading ahead of expectations. We have also continued to deliver against our M&A strategy and progressed two further transactions in June. In addition to Drache, we agreed to acquire GV Filtri, and we acquired Carekem. As previously announced, we are planning to host a Capital Markets Event this year. The date is set for the 14th of October here in London. The event will be an opportunity to hear more about the business and the group's three divisions, and to meet members of the senior team. We will also provide further insight into our future ambition, strategic priorities, and financial framework. Turning now to the financial results for the first six months.

[Hooman Caman Javvi, CEO at Porvair]

We delivered record revenue and profit. Revenue increased by 9%, and operating profit was up 10%, resulting in adjusted EPS increasing by 11%. Our expectations for the full year remain unchanged before taking into account the part-year contributions from GV and Carekem. At the bottom of this slide, you can see Porvair's track record for growth. As shown, the five, 10, and 15-year CAGRs are relatively consistent over a period when the group has grown from around GBP 60 million turnover to GBP 200 million today. In terms of the key themes in H1, we have seen variability across our end markets. We experienced strong aerospace demand. Nuclear was also up, and we saw growing demand from our aluminum end markets across all regions, and good demand for our value-added life science products.

[Hooman Caman Javvi, CEO at Porvair]

Petrochem was down as expected, reflecting reduced activity in Europe, followed a very strong comparator with record revenue in H1 2025. We also experienced mixed demand across industrial consumables. James will give you more color around the end markets in just a minute. As we all know, this has been a period of macroeconomic uncertainty, including events in the Middle East. These haven't had a material impact on the group so far, as our manufacturing footprint mainly serves local customers, and our decentralized management structure gives us flexibility and speed in navigating volatile trading conditions. Variability across end market isn't unusual for us, as we serve a range of markets in different parts of the world. While some markets can be down, we seem to experience others being up, and over time, resulting in a relatively consistent progress across the group.

[Hooman Caman Javvi, CEO at Porvair]

In fact, this reflects the strength and resilience of Porvair's diversified portfolio. Our focus with the Executive Committee formed last year has therefore been on enhancing execution, driving operational excellence, and strengthening accountability across the business. All of this is underpinned by disciplined capital allocation with continued investment across the business, including the final phase of the aluminum cast house upgrade in MMQ, which has been delivered on time and to budget. This has been complemented by three value-accretive acquisitions, which we will come back to. We finished the period with a net cash position of GBP 7 million after investing around GBP 21 million in CapEx and M&A. I will now hand over to James to talk you through the financials and the divisional performance.

[James Mills, Group CFO at Porvair]

Turning then to cover the financial performance for the six months, let me give you the headlines, before providing some detail on what has been driving the group performance in the period. Top left-hand side, total group revenue of GBP 106.2 million is up 9% on prior period, with this being the first time that the group has delivered over GBP 100 million of revenue for a half. Adjusted operating profit of GBP 13.8 million is up 10%, with the adjusted OP margin of 13% being an improvement of 10 basis points on the prior period, with some ups and downs within the group, which I will come to in just a moment. Adjusted basic EPS of GBP 0.221 is up 11%, and cash generated from operations of GBP 9.7 million, down 5%, with a return on capital employed of 14%, up 20 basis points on the prior period.

[James Mills, Group CFO at Porvair]

Turning to the income statement, these are the adjusted results only, which exclude the amortization of acquired intangibles and acquisition-related costs for the three deals that Hooman has just mentioned, and details of the adjusting items can be found in note one of this morning's announcement. Within the GBP 106.2 million of revenue, the net impact of Forex on the retranslation of the results has been modest, with a weaker U.S. dollar almost entirely offset by a stronger euros, and so the 9% reported revenue growth was also 9% on a constant currency basis.

[James Mills, Group CFO at Porvair]

These results include Drache for the first time, consolidated from the 12th of January, and when excluding Drache, organic constant currency revenue growth was 2%, with revenue performance adversely impacted by a GBP 7 million reduction in petrochemical activities within the Aerospace & Industrial division where the European petrochemical market has remained subdued as expected and as previously signaled. The group has delivered 2% organic growth, having managed a GBP 7 million reduction from Petrochem against a record prior period. I will give some color on the other end market performance across the group in just a moment.

[James Mills, Group CFO at Porvair]

As I mentioned, we delivered GBP 13.8 million of operating profit, a 10% increase on prior period with the margin at 13%, a 10 basis points improvement on prior period, having managed both the short-term dilution in margin effects from Drache, which comes in at around 10% and the operational gearing from reduced Petrochem activities, which on its own and all things equal, has had approximately 170 basis points impact to group OP margin. The impact of these margin headwinds has been more than compensated for by leverage on increased volumes in other areas, operational performance across the group, and of course, pricing.

[James Mills, Group CFO at Porvair]

The interest charge has remained broadly flat, noting that we drew down on our committed borrowing facilities, in the period to help fund the Drache deal and the effective rate of tax increased marginally from 22% in the prior period to 23%, all of which has delivered the 11% increase in adjusted EPS to GBP 0.221. Before leaving this slide, a word on the interim dividend at the bottom. In maintaining the group's progressive dividend policy, the board has approved a 9% increase in the interim dividend to GBP 0.024. Turning to the cash flow. Cash generation is clearly central to the group's business model, and supports our investment in both organic and inorganic future growth. Let me talk you through the headlines of the period. As I just mentioned, cash generated from operations was down 5% to GBP 9.7 million against the strong comparison.

[James Mills, Group CFO at Porvair]

As a reminder, the group typically sees a working capital outflow in the first half of the year, and the GBP 5.8 million outflow that you can see here in the line above, with the resulting cash generation is more typical of what we see at this time of year, supported as ever by strong working capital disciplines right across the group. Moving down the cash flow, we invested a total of GBP 21.2 million in acquisitions and CapEx in the period. Drache net of cash acquired was GBP 17.2 million, a provisional number which will be firmed up in the second half once we have agreed the final purchase price adjustment with the seller. We are not expecting a significant change.

[James Mills, Group CFO at Porvair]

We invested GBP 4 million in CapEx ahead of the usual run rates on a range of projects across the group, focused on capacity, productivity, and long-term efficiency, which in this period included the final GBP 1.5 million for the group's GBP 5.5 million investment in the aluminum casthouse production line in Hendersonville in the U.S. CapEx is expected to be around GBP 7 million for the full year. We drew down a net GBP 8.3 million on our committed borrowing facilities to help fund the Drache deal and still finish the period in a net cash position with GBP 7.1 million on the balance sheet. You can see at the bottom of the slide here, despite having invested GBP 21.2 million in Drache and CapEx.

[James Mills, Group CFO at Porvair]

It's the cash generative nature of the group's business model together with the strength of our balance sheet, which will continue to support ongoing investment in both organic and inorganic growth. Moving to the divisional review. Starting with Aerospace & Industrial, which delivered 41% of our group revenue in the period of which aerospace now accounts for around 11% of group sales and industrial the remaining 30%. Revenue is down 2% to GBP 43.8 million and down 3% at constant currency with operating profits at GBP 6.1 million and the margin at 13.9%. The end market dynamics have been mixed, which is not unusual for this division. As I mentioned before, revenue has been adversely impacted by a reduction in Petrochem activities, which can be lumpy and which resulted in a GBP 7 million reduction or 50% against a record prior period.

[James Mills, Group CFO at Porvair]

To note, we still expect the European Petrochem market to remain subdued for the rest of this year. In aerospace, revenue grew by 8% on prior period, and we continue to have good order visibility for aerospace into the second half, though scheduling can always be affected by the broader supply chain, including OEM stocking levels. We had a pleasing period for nuclear. As previously signaled, we had a healthy order book coming into this year, and the sector dynamics have remained favorable during the period. As we go into the second half, the nuclear order book remains healthy. Once again, we have some gasification revenue in the period, this time from a new customer contract, won in the second half of last year, which has been great in demonstrating our capability beyond our existing client base.

[James Mills, Group CFO at Porvair]

Whilst we still see future opportunities in the years ahead for gasification, we do not expect any more of this revenue in the remainder of this year. As with the group results, A&I has delivered this performance despite having managed a GBP 7 million reduction from Petrochem, the 70 basis points reduction in margin is largely a result of the operational gearing on net reduced volumes given the Petrochem reduction, which on its own and all things equal, has had approximately a 350 basis points adverse impact on the OP margin within this division. Turning to laboratory, which delivered 31% of our group revenue in the period. The revenue profile is slightly weighted towards life sciences, which accounts for just over 15% of group sales and environmental, our SEAL Analytical business just under 15%.

[James Mills, Group CFO at Porvair]

Revenue was up 3% to GBP 33.2 million and up 4% at constant currency with revenue growth balanced evenly across both life sciences and environmental with consistent demand within both. Operating profit at GBP 5 million and the margin at 15.1%. As ever, the division continued working on a range of new product introductions across both life sciences and SEAL Analytical, all of which bode well for the future. In terms of the drivers behind the margin performance, progress has been delivered through the value-add product offerings and continued operational performance supported with capital investment. Finally, turning across to Metal Melt Quality, which this time, with the inclusion of Drache, delivered 28% of our group revenue in the period from sites in the U.S. and China, and now also, of course, from Germany.

[James Mills, Group CFO at Porvair]

Aluminum casthouse filters now account for approximately 12% of group sales, with a range of filters and solutions for other applications making up the remaining 16%. Reported revenue was up 40% to GBP 29.3 million and up 46% at constant currency. If we exclude Drache, organic constant currency revenue growth was 10%. Operating profit is at GBP 4.6 million and the margin at 15.7%. In terms of the drivers of performance in the period, aluminum demand has remained robust, and we expect to see this demand continuing over the long term, given its infinite recyclability, its strength-to-weight benefits, particularly for use in transport, the initiatives to replace plastic and steel with aluminum, and increasingly, the energy efficiency of casthouse recycling, which is where we mostly play compared to primary aluminum production.

[James Mills, Group CFO at Porvair]

As an update on the group's GBP 5.5 million aluminum casthouse investment in the U.S., which we've talked to previously, being the upgrade of the production facilities, as Hooman has mentioned, the project has completed on time and to budget in the period. As a reminder, that is a once in a 20-25 year CapEx, which replaces the outdated line, increases capacity, and all of which will set the U.S. business up for future growth within the aluminum market. Coming back to the performance, the superalloys products range has delivered another pleasing performance with revenue growth driven by ongoing sector demand within both aerospace and energy. It's the performance of aluminum and superalloys, which once again has continued to drive revenue growth and margin performance in the division.

[James Mills, Group CFO at Porvair]

With the 20 basis points reduction in margin being a result of improvements in the underlying business from value-add products, continued operational excellence, and operating leverage on increased volumes, which have been more than offset in this period by the short-term dilutionary effects of Drache margins. That's all from me for the moment. Back to you, Hooman.

[Hooman Caman Javvi, CEO at Porvair]

Thanks, James. Let me now tell you about what we have been up to in the period. As said, it's been a busy one for us. We have made strong progress against our strategic priorities. As you know, last year, we formed an ExCo with the objective of enhancing execution and increasing momentum. It's about sharpening performance management, aligning on priorities as a team, and deciding based on what's best for the group. Our decentralized model has several benefits, such as empowering the businesses to make decisions close to the markets they serve, creating an entrepreneurial spirit, and a strong sense of ownership throughout the organization. In such a model, earned autonomy and accountability is essential. Our operating model drives profitable growth while we continue to strengthen accountability across the business.

[Hooman Caman Javvi, CEO at Porvair]

It's also about sharing best practices between the divisions, such as approach to new product development, safety, operational best practices, and driving a culture of continuous improvement. We have got amazing people in our business, and we continue to invest in people and leadership development to strengthen capability and improve succession planning. Leveraging expertise and resources across the business and across divisions is also an area to continue to actively work on as an ExCo. We've also taken the opportunity to strengthen the team in targeted areas. As a cash-generative business with a strong balance sheet, it's all about disciplined approach to capital allocation, and we have improved the CapEx governance with focus on business case accountability and improved post-investment reviews. All of these are assessed against internal hurdle rates.

[Hooman Caman Javvi, CEO at Porvair]

On M&A, the ExCo, with the support of the central M&A resource and input from general managers across the group, proactively manages an M&A pipeline. Much of last year was about structuring the M&A work, building the pipeline, and evaluating opportunities in a disciplined manner against well-defined M&A criteria. While we have reviewed many opportunities, we have completed three highly complementary transactions, one in each division, for a total GBP 25 million consideration spent on M&A so far this year. This compares with the last 10-year average spend on M&A of circa GBP 7 million per year. When we then acquire the businesses, the integration is crucial and we have improved the integration process with disciplined governance, and I will tell you more about how the Drache integration is going on the next slide.

[Hooman Caman Javvi, CEO at Porvair]

As we continue to work on the many initiatives we have ongoing, it will strengthen the execution, build the capabilities we need to capture the opportunities the business faces, and reinvesting in the business. All of which ultimately will drive margin improvement and profitable growth. We are looking forward telling you more about this at our Capital Markets Event in October. Let me now say a few words about the three acquisitions. Starting with Drache, which we completed in January and was the largest deal in Porvair's recent history in the last 30 years. The business is a leading supplier to the aluminum filtration market and is an excellent fit with our MMQ division. As James mentioned, the growing global demands for aluminum is one of the many attractive end markets in which the group operates.

[Hooman Caman Javvi, CEO at Porvair]

In terms of completion update, the integration is progressing as planned with a solid 30, 60, 90-day plan in place with disciplined governance to ensure progress. The MMQ teams are working closely together between the U.S., Germany, and China to drive commercial and operational improvements. Early trading is ahead of expectations. As you may recall, this was a business below our divisional margin corridor for operating margin when acquired, and despite integration cost, it has already reached within the divisional corridor after four and a half months with the group. This is a good example of our disciplined M&A approach and strategy in action. We move on to the further two acquisitions post period end, we've also reached an agreement to acquire GV Filtri for EUR 6.7 million with completion pending regulatory approvals. This business specializes in engineering and manufacturing of industrial filters and filtration systems.

[Hooman Caman Javvi, CEO at Porvair]

It serves various industrial applications and end markets and has a turnover of approximately EUR 5 million. GV is a business we have known for many years and have an existing business relationship with. Under its current management, the business will join our Aerospace & Industrial division, increasing the division's capability and reach into the Italian market. It will also bring complementary products to those we currently have and enable cross-selling opportunities for the division. Finally, we acquired Carekem, a U.K. laboratory servicing company focused on environmental instruments for around GBP 1 million. This is a small bolt-on acquisition for our SEAL Analytical business within our Laboratory division. It will give SEAL access to a new customer base, enable cross-selling opportunities, and to scale our SEAL U.K. business.

[Hooman Caman Javvi, CEO at Porvair]

All in all, so far this year, we have done three highly complementary acquisitions, one in each division for an aggregate consideration of GBP 25 million, and we continue to proactively manage and develop a pipeline of opportunities. We will also tell you more about our structural approach to M&A during our CME. Let me quickly remind you of our investment case. We make products that are regularly replaced. They contain emissions, clean up processes, reduced waste, et cetera. Demand is driven by the global growth trends shown at the top right, Porvair remains well-positioned to benefit from end markets with long-term potential. These demand drivers, along with our business model, are what have delivered the five, 10, and 15-year growth track records you've seen. The advantages of making specialist filters are reflected in the attractive business characteristics shown in the middle of the slide.

[Hooman Caman Javvi, CEO at Porvair]

We make largely bespoke products with recurring revenue and high customer retention. Our products are regularly replaced, either by regulation or maintenance schedules, so there is a stickiness to the business. We generally have good barriers to entry. Some patents, more importantly, quality accreditations and the fact that the customers will need to re-qualify if they want to change supplier. Our strategic purpose then is to develop these businesses for the benefit of all stakeholders. We principally measure success through consistent earnings growth. This consistency is fundamental how we manage the business. We aim on generating value by focusing on the right markets. Key to how we run the business is our decentralized structure with a lot of customer-led product development going on across the business.

[Hooman Caman Javvi, CEO at Porvair]

All about allocating capital, and our priorities are firstly, organic growth opportunities, and then M&A when we can find good businesses at a reasonable price. How we try to achieve this is through our three divisions shown here and the markets these serve. You can also here see our main operating companies within each division. This slide illustrates what we mean by regulated markets, which is particularly clear in Aerospace with the FAA and CAA accreditations. You can also see the growth drivers and growth rates for these markets, as well as our competitive advantages. In our case, the engineered design and installed base is important. Once we have been qualified to deliver a specific filter for a specific application, it becomes a sticky business and gives us high recurring sales. You also see the margin corridor for the three divisions at the bottom of this slide.

[Hooman Caman Javvi, CEO at Porvair]

This describes what we do, why we do it, and why we have enjoyed the growth rate the group has delivered. Historically, around half the growth delivered has come from the market and the other half from new product development and M&A. Turning to the final slide and the outlook. You can see the key points summarizing the first half of 2026 at the top. In terms of the outlook, there is much to look forward to in 2026. Continuing the integration of Drache, welcoming GV and Carekem to the group, and new product introductions in aerospace, SEAL Analytical, and Porvair Sciences. Although we expect the subdued market conditions for Petrochem in Europe to remain throughout 2026, we see no change to the fundamental demand drivers for the group. These have served the group well in the past and will continue to do so.

[Hooman Caman Javvi, CEO at Porvair]

Before taking into account the part year contributions from GV and Carekem, the expectations for the full year remain unchanged. We will therefore continue to deliver on our priorities, invest in the business as per capital allocation framework, we remain committed to a strategy of organic and inorganic growth.

Participants

Executives

• Hooman Caman Javvi, CEO
• James Mills, Group CFO