Avingtrans : Annual Report Year ended 31 May 2025

About this update from Avingtrans Plc

PINPOINT-INVEST-EXIT 2025 Annual Report About Avingtrans plc has a proven strategy of "buy and build" in highly regulated engineering markets, a strategy it has named "Pinpoint-Invest-Exit". Significant shareholder value is delivered through a clear strategy, a strong balance sheet and an agile and experienced management team. https://www.avingtrans.plc.uk About us Delivering shareholder value through a proven strategy of Pinpoint-Invest-Exit in highly regulated global engineering markets The Group has a proven track record in delivering shareholder value through PIE: Identifying and executing prudent deals with precision and speed Building strong brands and value from constituent parts Crystallising these gains with periodic sales of businesses at advantageous valuations Returning the proceeds to shareholders 2015 31 Acquired Rolls Royce pipes; Sold Sigma 2016 50 Returned £19.4m to shareholders; Acquired Scimag & Whiteley Read 2017 43 19 Acquired HTG & Ormandy 2018 67 Acquired Tecmag 2019 71 Acquired Booth and Energy Steel 2020 77 2021 137 2022 139 2023 128 Acquired Magnetica, sold Peter Brotherhood Acquired Transkem, invested in Adaptix 2024 139 Acquired HRS Acquired Slack & Parr and Adaptix 0 30 60 90 120 150 Timeline 2016 (180p) 2017 (235p) 2019 (217p) 2021 (335p) 2024 (420p) The Aerospace Division, Sigma Components, sold for £65m Acquisition of the Hayward Tyler Group for £29.4m and creation of Energy and Medical Divisions Acquisition of Booth Industries for cash consideration of £1.8m Peter Brotherhood sold for an Purchased Slack & Parr and enterprise value of £35.0m, Adaptix and acquisition of Magnetica Market Cap £m Tender Offer £m Energy Division Performance critical solutions for energy systems Advanced Engineering Systems (AES) Division During the year we merged the two energy divisions into a single division, Advanced Engineering Systems. The division's portfolio includes a range of established brands: Booth, Hayward Tyler, Slack & Parr, Ormandy, Composite Products, Energy Steel, and Stainless Metalcraft, each contributing specialized expertise and solutions to the global energy, infrastructure, and industrial markets. The division is focused on growing its presence in the nuclear sector through its decommissioning, extended-life, and next-generation nuclear offerings. Medical Division Innovative solutions for medical systems and research Our Medical and Industrial Imaging division ("MII") is focused on becoming a leading player in the production of compact helium-free Magnetic Resonance Imaging ("MRI") systems and 3D X-ray systems. During the year we acquired Adaptix, a UK-based technology company specializing in the development and commercialization of 3D X-ray systems. Adaptix aims to transform the accessibility and utility of X-ray imaging by creating compact, portable devices that deliver high-quality images at a lower radiation dose. Our Magnetica, SciMag, and Tecmag businesses are collaborating in the development of compact helium-free MRI systems, which are being designed and manufactured entirely in-house. " Commenting on the results, Roger McDowell, Chairman, said: "We are pleased to present another solid set of results. In many aspects, this year has been challenging, but Avingtrans has once again performed very well as a group and exceeded market expectations. During the year, we made prudent use of our robust balance sheet by purchasing Slack & Parr and Adaptix, to strengthen our positions in specialist pumps and medical imaging. We also increased our investment in Magnetica's cutting-edge MRI systems. We have a strong order book going into FY25, and we anticipate growing as a Group this year thanks to favourable macro conditions in the energy, infrastructure, and healthcare sectors." Financial highlights Revenue from continuing operations increased by 17.3% to a record £136.6m (2023: £116.4m) Gross Margin was stable at 32.2% (2023: 32.9%) Adjusted EBITDA from continuing operations was slightly ahead of the upgraded market expectations at £14.0m (2023: £13.7m), following planned strategic investments in Adaptix and Magnetica, Underlying Adjusted EBITDA (excluding acquisitions) was £16.5m Adjusted PBT from continuing operations was £7.3m (2023: £9.0m), excluding acquisitions was £12.0m Adjusted Diluted earnings per share from continuing operations was 18.5p (2023: 23.4p) Net Debt (excluding IFRS16) as of 31st May 2024 of £6.1m (Net Cash 31 May 2023: £13.0m) Final dividend of 2.9p per share proposed, resulting in a total dividend of 4.7p per share (2023: 4.5p) Operational highlights - Advanced Engineering Systems Division Revenue increased by 17.8% to £132.9m (2023 £112.8m) Improved result with Adjusted EBITDA up 13.5% to £17.9m (2023: £15.5m) Metalcraft contract to supply the Sellafield 3M3 boxes continues, in phase two of the programme Booth commenced manufacture of HS2 door frames. Aftermarket sales increasing strongly Ormandy records best result since acquisition, following successful integration of HES/HEVAC in 2023 Acquisition of the assets of S&P in August 2023 for £4.1m. S&P records creditable first year result Two new nuclear decommissioning contracts won by Metalcraft, worth £14.5m combined HT Luton won £2.5m defence contracts from Rolls Royce and a further £3.0m from Forsmark HT Inc won $10.0m pumps contract from TerraPower, for next generation nuclear power station Operational highlights - Medical & Industrial Imaging Division Revenue stable year on year at £3.7m, pending the volume build-up of new MRI and X-ray products As anticipated, LBITDA increased to (£2.8m), vs 2023: (£0.6m) as MRI and X-ray development projects progress Acquisition of the remaining interest in Adaptix for a total combined consideration of £7.2m, including absorbed and repaid debts Magnetica and Adaptix both appointed first US distributor, Televere Systems Strong market pull for both businesses at trade shows, supported by compelling sales propositions Adaptix equipping Scottish facility to manufacture key system components for Vet and Ortho products Magnetica expanded into a bigger factory, to facilitate volume MRI system production, starting in 2025 Tecmag moved into improved premises, to gear up for Magnetica and Adaptix product sales in the USA Adaptix commenced sales of Vet products in the UK and USA. Volume build-up expected in next FY 1 Adjusted to add back amortisation of intangibles from business combinations, acquisition costs and exceptional items. For the year ended 31 May 2025 Company registration number: 01968354 Registered office: Chatteris Business Park Chatteris Cambridgeshire PE16 6SA Directors: R S McDowell (Non-executive Chairman) S McQuillan (Chief Executive Officer) S M King (Chief Financial Officer) L J Thomas (Non-executive Director) J S Clarke (Non-executive Director) J S Reedman (Non-executive Director) Website: https://www.avingtrans.plc.uk Secretary: S M King Bankers: HSBC Bank plc Royal Bank of Scotland PO Box 68 2 St Philips Place 130 New Street Birmingham Birmingham B3 2RB B2 4JU Registrars: MUFG Corporate Markets Central Square 29 Wellington Street Leeds LS1 4DL Nominated advisor and broker: Singer Capital Markets Advisory LLP 1 Bartholomew Lane London EC2N 2AX Solicitors: Shakespeare Martineau LLP No1 Colmore Square Birmingham B4 6AA Independent Auditor: Cooper Parry Group Limited Statutory Auditor Sky View Argosy Road East Midlands Airport Castle Donington Derby DE74 2SA Page Chairman's statement 3 Strategic Report 4 - 20 Report of the directors 21 - 24 Corporate governance 25 -29 Report of the directors on remuneration 30 - 31 Independent auditor's report 32 - 36 Principal accounting policies 37 - 49 Consolidated income statement 50 Consolidated statement of comprehensive income 50 Consolidated balance sheet 51 Company balance sheet 52 Consolidated statement of changes in equity 53 -54 Company statement of changes in equity 55 Consolidated statement of cash flows 56 Company statement of cash flows 57 Notes to the annual report 58 - 88 Notice of Annual General Meeting 89 - 92 Once again, we are pleased to announce that Avingtrans has demonstrated a strong performance across the period, with record revenue and Adjusted EBITDA and PBT slightly ahead of the previously upgraded market expectation (note 4). The modest Net Debt position was materially below the expected outcome. We have a very healthy order book as we move into FY26 which has been bolstered by a number of recent contact wins in AES. Our Pinpoint-Invest-Exit ("PIE") mantra has been the core of our strategy for many years. It was again successfully deployed in shaping investments in Slack and Parr, Adaptix and Magnetica in the period. Whilst still on a recovery journey, Slack and Parr produced improved year on year results. Both Magnetica and Adaptix continue to make positive progress, having developed disruptive and complementary medical imaging products, particularly for orthopaedic applications. Our value creation goals are on track, supported by a conservative approach to debt, which the Board continues to view as prudent. We are optimally structured for future exits that should maximise shareholder value. In the period, our Advanced Engineering Systems (AES) division went from strength to strength. We continue to invest in AES and the results again demonstrate that we are proactively managing strong progress in this division. Notably, there were record results at Hayward Tyler and Ormandy in FY25, with good progress also at Metalcraft and Booth. In the Medical and Industrial Imaging (MII) division, the marketing of the 3D X-ray systems at Adaptix and the development of compact helium-free MRI systems at Magnetica have made substantial progress in achieving key milestones in 2025. Magnetica's 510k application to the FDA in the USA has been further delayed until H2 FY26, mainly driven by the FDA's vastly increased cyber-security requirements for imaging systems. These delays result in some increases to the commercialisation plans and costs for the medical division, though these costs are partially offset by R&D tax incentives and are otherwise absorbable. We are very excited by customer feedback from the images being produced by both our MRI and 3D X-ray systems. Adaptix continues to build up its distribution channels in the UK, Europe and USA, with sales of Vet, Non-Destructive Testing and Orthopaedic products now all underway. Our divisional management teams have again demonstrated agility and resilience, building strong business platforms. Aftermarket growth in AES remained steady, supporting our value propositions to OEM and end-user customers. The positive sentiment in the nuclear sector, defence and, to an extent, in oil and gas resulted in increased orders in those arenas. The focus on end-user access continues to drive improved profitability and underpins our product and service development. The investments in Adaptix and in Magnetica have firmly established the Medical and Industrial Imaging (MII) division as a new specialist imaging systems supplier, with exciting X-ray and MRI products now well advanced. The Board is encouraged by the division's potential, expecting longer-term, highly positive returns for the Group, we will carefully consider the best route to deliver shareholder value. In view of the promising overall results, the Board is proposing a final dividend of 3.0 pence per share, resulting in a total dividend of 4.9p for the year (2024: 4.7p). With a robust balance sheet, the Group remains vigilant in seeking shareholder value-enhancing M&A opportunities, while also being cautious and selective in a still uncertain world. As always, I extend my heartfelt appreciation and thanks for all Avingtrans employees' hard work and for their dedication and resilience in navigating another challenging, but ultimately successful year. Roger McDowell Chairman 23 September 2025 Group Performance Strategy and business summary Group Strategy Our core strategy is to buy and build engineering companies in niche markets, particularly where we see turnaround and consolidation prospects; a strategy we call Pinpoint-Invest-Exit ("PIE"), thanks to which, we have had a strong track record in returning significant shareholder value for well over a decade. With an increased presence in our target markets, a focus on aftermarkets, strength in depth of the management teams and a lean central structure, the Group continues to grow profitably - despite the effects of macroeconomic uncertainties - and the Board is focused on seeking additions to the Avingtrans value-add proposition. The majority of the Group's adjusted key financial metrics trended positively in the period, despite the ongoing impacts of global financial stress. The Group is focused on the global Energy, Infrastructure and Medical markets, which play into some of the world's mega-trends, such as urbanisation; ageing populations; and a transition towards a cleaner and healthier planet. Divisional Strategies Advanced Engineering Systems (AES): AES continues to strengthen its nuclear installed base, focusing on civil, defence, and national security applications, particularly for life extension purposes. The business also explores opportunities in the hydrocarbon market sectors. In the USA, Hayward Tyler ("HT") is actively developing solutions for new nuclear technologies and other low carbon energy sources, like concentrated solar power, to leverage the global energy supply transition. HT has been executing the large contracts it previously secured, including pumps for the next generation nuclear business, TerraPower, in the USA and further life extension equipment for the Forsmark nuclear power station in Sweden. The HT strategy is strengthened by partnership agreements with companies like Shinhoo, expanding our product portfolio and creating cross-selling opportunities. The 2023 acquisition of Slack and Parr further enhances our global specialist pumps footprint. An important target for AES is to establish a comprehensive offering in the nuclear decommissioning and waste management markets, building on long-term contracts for nuclear waste storage containers and the existing equipment installed across the vast Sellafield site. During the period, Metalcraft and Sellafield Limited continued with the contract to provide high integrity stainless steel storage boxes for Sellafield. The 3M3 ('three metre cubed') box contract is currently valued at over £60m worth of boxes still to be manufactured. The division's nuclear credentials were again enhanced by Booth Industries' strong performance, expanding our market reach into Critical National Infrastructure (CNI). Booth's multi-year contract with HS2, currently still worth over £30m, is progressing well, with manufacturing of doors now having commenced and two additional contracts from HS2 having been won in recent months. Ormandy's market position in HVAC was strengthened by the HES/HEVAC acquisition in 2023, with a resulting wider product proposition including AI and data centres. AES continues to benefit from a robust prospect pipeline, positioning it well to bid for new opportunities as they arise. Medical and Industrial Imaging (MII): Following the Magnetica acquisition in 2021 and the acquisition of the remaining shares in Adaptix in 2023, the focus for the highly experienced management teams in the medical division is to become a niche market leader in the production of compact helium-free MRI systems and 3D X-ray systems, for applications such as orthopaedic and veterinary imaging and non-destructive testing (NDT). This is an exciting opportunity for the Group. In support of the core strategy, the division will continue to work on niche Nuclear Magnetic Resonance (NMR) and scientific magnet products and services, since these are complementary technologies. Adaptix's 3D X-ray technology is being developed in parallel to Magnetica's MRI technology and, as we envisioned, the two businesses are working together in a complementary manner. Across the Group's customers, we are capitalising on the continued pressure on aftermarket expenditure, where operational efficiency, reliability and safety are paramount. Customers are looking for reliable supply chain partners, to provide long term support of both new infrastructure and legacy installations. Pinpoint-Invest-Exit Continuing with our evergreen Pinpoint-Invest-Exit strategy, we have been working through structured investments in Magnetica, Adaptix and Slack and Parr as mentioned earlier. The Group invested around £13m in Magnetica and Adaptix in the period, as both businesses press ahead, to complete the development and commercialisation of their disruptive imaging products. The Group remains confident about the current strategic direction and potential future opportunities across its chosen markets. Some of our market sectors (eg Nuclear and defence) benefitted from the global trends in the period, such as a worldwide drive to build more AI and data centres and global security issues. Markets - Energy The global demand for energy remains relentless and we anticipate sustained growth in the coming years. The aftermath of the pandemic and recent conflicts have spurred a push towards enhanced efficiency and decarbonisation. However, the Russia-Ukraine conflict subsequently raised political awareness of the importance of energy security, leading to a recalibration of the rush towards renewable energy in the short to medium term. The energy hungry deployment of AI and growth in data centres will further increase world energy consumption. This situation could potentially benefit our businesses, notably in the nuclear sector. End User/Aftermarket Operators and end-users demand a quick response through local support and a requirement to drive improvements through equipment upgrades and modernisation. Power stations are being operated for much longer than their intended design lives, resulting in a strong demand for solution providers in the supply chain to partner with end-users for the longer term. The AES division is well positioned to grow in this end-user market space. Nuclear Nuclear energy as a low carbon, baseload power source remains an asymmetric market with respect to future growth. Almost all the 1GW+ new build opportunities are in Asia, with the exception of the limited UK programme and recent plans announced in France. However, we are still experiencing buoyant market segments, including supporting the operational fleet, continued safe operation and life extensions, decommissioning and waste management. We are also working on the long-term development of the next generation of technologies - i.e. Small Modular, or Advanced Generation IV Reactors - e.g. with TerraPower and GE-Hitachi. In addition, these segments all have the backdrop of a consolidating supply chain and paucity of expert knowledge. The USA still operates the biggest civil nuclear fleet in the world, with 94 reactors generating around 30 percent of the world's nuclear electricity. Coupled with the heritage Westinghouse technology operating in Europe and Asia, the division's longstanding position in this market provides opportunities for further growth. Obsolescence and life extension are key issues for nuclear operators worldwide and the AES division is well positioned to support operators in addressing this critical risk. The UK remains pre-eminent when it comes to decommissioning nuclear facilities and subsequent waste management, in terms of innovative technology and overall spend. The Group is embedded in the future manufacture of waste containers for Sellafield and NRS (formerly Magnox) and will continue to expand its presence in the UK and globally in the longer term. The development of new nuclear technologies is ongoing, with activity in the UK, South Korea, the USA and China dominating development activity. The Group views these new technologies as an attractive route forward for nuclear and is well positioned to develop as a global industry partner. Power Generation The world continues to electrify, with an increasing amount of primary energy going to the power sector, which remains a key focus across the Group's AES division. Aside from nuclear, the main sub-sectors are as follows: Coal - the Group continues to see good aftermarket activity from coal fired power stations even though the demand for new power stations is in decline in most of the world. Opportunities still exist in India, China, Southeast Asia and Eastern Europe. AES has optimised its product line, to take market share and to create new opportunities - e.g. in products to remove toxins from the exhaust stacks of power stations. Gas - natural gas, primarily in the form of combined cycle gas turbine power plants has been a growing market space, primarily in the West, albeit disrupted by the Russia-Ukraine conflict. The Group continues to develop this market with both existing and new product lines. Renewables - renewable technologies and their supporting infrastructure are a growing market globally. The Group has a range of products that can be applied directly to this market segment and also has expertise that can be used to develop new products for niche parts of this market, such as molten salt pumps for concentrated solar applications. Hydrocarbons The conflict in Ukraine initially resulted in a surge in European gas prices, leading to unprecedented levels of volatility in the energy market. Our Hayward Tyler businesses have long been associated with providing top-notch subsea and submersible pumps and motors to the oil and gas fields of the Norwegian Shelf. Recently, we have experienced stronger demand for both new equipment and aftermarket services, as the market seeks to maximise supplies from this region. The current situation, coupled with informed forecasts, indicates that the demand for our products and services is likely to remain relatively solid. This presents a promising opportunity for our business to further capitalise on the evolving energy landscape. Infrastructure, Defence and Security Global safety and security concerns, as well as risk mitigation on large infrastructure projects, are key drivers for growth at Booth and we are cultivating these opportunities carefully. Thus far, the vast majority of Booth's sales are in the UK but the business is building up a prospect pipeline overseas. We have also continued to build the aftermarket order book, with good prospects. Infrastructure, Defence and Security (Continued) With NATO recently agreeing to significantly increase defence spending across the entire alliance, this brings expanded opportunities for the Group. Notably, at Hayward Tyler, we have seen increased interest and orders from defence primes, who are turning to HT for expertise in propulsion equipment. Threat detection standards for baggage handling at airports and package scanning have been tightened everywhere around the world - especially in Europe and the USA. With many millions of bags and packages flowing across border crossings every day, screening devices have to comply with threat detection standards without impacting throughput. Rapiscan, the biggest customer for Composite Products, is a market leader in this sector, whose presence is increasing as new standards are rolled out. At Adaptix, we are exploring various possible security applications of their 3D X-ray technology products as tools in various Non-Destructive Testing (NDT) markets, for example to image composite and additive manufactured parts, with an estimated total addressable market of c$1.4bn. Markets - Medical The Diagnostic (medical) and molecular imaging markets are large global sectors, dominated by a few large systems manufacturers. The total Medical Imaging Market is expected to reach $55.4billion by 2030 according to Grand View Research, a compound annual growth rate of 5.0%. The largest market is the USA, followed by Europe and Japan. The fastest growing markets are China and India. Magnetica and Adaptix are emerging medtech leaders in the fields of compact helium free MRI and 3D tomosynthesis X-ray equipment. The objective of both businesses is to create innovative, niche MRI and X-ray systems OEMs, which can address specific parts of the market, not well served by dedicated products at present. This includes orthopaedic and veterinary imaging. The development paths of Magnetica and Adaptix are convergent, which enables both businesses to benefit from efficiency and cost gains, as well as optimising the route to market - especially in orthopaedics. Market drivers for these segments include an ageing global population, the rising incidence of chronic diseases and increasing companion animal ownership. The growing prevalence of chronic diseases, especially in older populations, is increasing demand for medical imaging in hospitals and other diagnostic settings. Technical innovations, including advances in artificial intelligence (AI), have increased the reliability and accuracy of medical imaging, thus driving further demand in global healthcare. Conversely, the market is somewhat inhibited by the high cost of current medical imaging systems. In 2024, X-ray systems held approximately 32% of the market share, while MRI systems accounted for around 18%. Our estimates indicate that over 20% of all diagnostic imaging scans are related to limbs. As a result, the combined addressable market for Magnetica and Adaptix in medical imaging is approximately $3 billion, in theory. However, it is important to note that the actual addressable market is likely smaller, since both businesses have chosen not to target sales to hospitals. Instead, they are focusing on deploying their products in specialised clinics, where the product attributes align closely with the specific needs of these establishments, for fast, effective imaging at the point of care. Notably, our strategy is to attack the markets in smaller "point-of-care" locations, where the main players (eg GE, Philips and Siemens) are not present, since they are generally focused on whole body systems located in hospitals. Additionally, our systems are designed to eliminate circa 90% of the infrastructure costs, which severely curtail the locations where whole body systems can be sited worldwide. Additionally, both Magnetica and Adaptix have plans to expand into other imaging markets, notably the veterinary sector. This is in response to the lack of dedicated products in this arena, which has hindered the widespread use of sophisticated imaging systems in veterinary practices. By targeting these specialised markets and addressing their unique requirements, both companies aim to further grow their market share and create a disruptive impact in the medical and veterinary imaging industries. End User/Aftermarket Diagnostic imaging is dominated by a handful of manufacturers, including: GE, Siemens, Philips and Canon. These OEMs account for circa 80% of revenue globally. These same players also dominate the aftermarket, though there are a few independent MRI service businesses in existence. Avingtrans is not present in the imaging aftermarket at this time. Operations Operational Key Performance Indicators (KPI's) for continuing operations 2025 2024 Percentage of total revenue from continuing operations deriving from aftermarket revenue 33.2% 38.2% Customer quality - percentage of defect free deliveries 94.3% 89.0% Customer on-time in-full deliveries 79.1% 73.6% Annualised staff turnover including restructuring 13.8% 15.8% Health and Safety incidents per head per annum 0.05 0.07 Environmental incidents per annum 0 0 Operations (continued) Aftermarket sales have decreased by 1% in the year, to £51.9m (2024: £52.2m). However, the strong growth in original equipment sales meant that the percentage of aftermarket sales fell to 33.2% (2024: 38.2%). Both defect-free deliveries and on-time deliveries improved in 2025, reflecting the benefits of ongoing operational enhancements. These improvements were driven by several factors, including the standardisation of products, enhancements to product design, and the continued development of close working relationships with our supply chain partners. We are pleased to report a reduction in Health and Safety incidents during the year, with employee incidents per head falling from 0.07 in 2024 to 0.05 in 2025. In absolute terms, there were 53 employee incidents reported in the year, down from 67 in the prior year. Importantly, there were no fatalities in either period, and no injuries involving contractors in the current or prior year. These results reflect our continued focus on maintaining a safe working environment across all operations. As in 2024, there were zero environmental incidents recorded in the Group.. AES Division - Energy and Infrastructure The AES division comprises: Hayward Tyler (HT), Energy Steel (ES), Booth, Metalcraft, Ormandy, Slack and Parr and Composite Products. The division's results again increased materially in the period, both for OE and aftermarket sales. For Hayward Tyler ("HT"), the main priorities remain to strengthen its aftermarket capabilities and to maximise opportunities in the nuclear life extension market and to expand our defence offerings to UK and US primes. HT was able to deliver a robust result in the period, yet again the best outcome since acquisition, with a strong order book and prospects for the year ahead. At HT Luton, aftermarket activities remain the focus, including the servicing of third-party equipment. The follow on £3m contract in Sweden with Vattenfall for the Forsmark plant (for nuclear life extension) progressed positively in the period. Further defence orders worth £3.5m have also been received from Rolls Royce. Hydrocarbon related orders from the UK North Sea sector remained steady. Regarding the HT Luton site redevelopment, there has been limited recent progress, as interest rates in the UK have dampened construction interest for the time being. Therefore, the sale of the site remains paused. The HT Fluid Handling business in Scotland has been recombined with HT Luton to further align product offerings and enhance routes to Market following a reduction in legacy business, although it did trade positively at operating profit. HT Inc in Vermont (USA) continues to see solid order intake in the nuclear life extension market in the USA. HT Inc's new R&D opportunities in next generation nuclear power have made good progress, especially the design and development contract for TerraPower, which is progressing to plan. Post period end, HTI secured $16m of nuclear equipment and spares orders from KHNP in S. Korea HT Kunshan (China) has developed a very healthy order book, including an improving position in the aftermarket business, with new orders coming from Chinese power station OEMs working on reducing the environmental impact of electricity production. In India, the local team again delivered a solid annual performance, as India's energy requirements continue to expand. Energy Steel ('ES') in Michigan (USA) had a challenging year, with several underperforming historic contracts impacting profit, but ES finished strongly with a much improved H2 and a very solid order book to enter FY26 with increased confidence. Metalcraft continues to make good progress with Phase 2 of the Sellafield 3M3 ("three metre cubed") box contract and with contracts from NRS (formerly Magnox). The next follow-on 3M3 box contract tender, expected to be worth over £900m, is now expected to be tendered in 2026 by Sellafield. The apprentice training centre in Chatteris continues to build momentum. Ormandy again achieved a record performance in the period, with a robust order book, moving into FY26. Ormandy has made excellent progress in building its aftermarket business, with aftermarket now comprising 13.6% of revenue Booth Industries sustained its consistently robust performance. Booth has a record order book, including the large order for HS2 cross-tunnel doors, which was not affected by the HS2 phase 2 cancellation. Post period end, an additional £7.5m order was awarded for doorsets for HS2's Old Oak Common station. We continue to make good progress in building an aftermarket business at Booth, which has strong growth potential. Composite Products had a solid year, boosted by orders from Rapiscan and some new customers placing initial orders. Slack and Parr continued its recovery journey as part of the Group and produced improved year-on-year results. Their specialist gear metering pumps are sought after worldwide, for a variety of applications, including the precision production of high-end fibres - eg Kevlar and Lycra. Operations (continued) MII - Medical Division: Magnetica and Adaptix Magnetica, Scientific Magnetics (SciMag) and Tecmag are working effectively together to make good progress on our exciting development of compact, superconducting, helium-free MRI systems entirely in-house. Magnetica was able to carry out limited marketing of its prototype system in the period, but the FDA 510(k) approval is now anticipated in H2 of 2025. The delay is mainly due to significantly increased demands by the FDA regarding cyber security. Our initial estimate of the addressable MRI orthopaedic imaging market is circa £1.7bn p.a. (by 2030). This is assuming a capital sale model. Our intended longer term "pay per scan" business model could mean that the opportunity is significantly larger. It is more difficult to quantify other potential market segments (e.g. veterinary imaging) at this stage because equivalent, dedicated products do not exist. We believe that materially reducing the size and total costs of these dedicated MRI systems, coupled with them being much easier to set up in a variety of locations, as well as increasing the scan rate by up to 300%, will produce a compelling sales proposition, again confirmed by interest from Key Opinion Leaders at the prestigious Radiological Society of North America conference, in Chicago. In addition, these dedicated systems could free-up capacity on the existing MRI system installed base, which should be a major benefit to healthcare organisations worldwide. SciMag and Tecmag will rebrand in due course, to present a seamless image for the business. However, there is still merit in continuing with various existing products and services at SciMag and Tecmag, so long as they do not detract from our core vision for MRI, which holds out the prospect of materially increasing the value of Magnetica over the coming years. Orders for existing SciMag and Tecmag products were robust in the period. Adaptix has now launched its compact 3D X-ray system for orthopaedics and veterinary applications in the UK, Europe and USA. Sales have also commenced of a non-destructive testing (NDT) product. We estimate that the Total Addressable Market value of these three segments is $6.8bn pa. Adaptix has now appointed multiple distributors as its channels to market expand to drive commercialisation of the products. The strategies of Magnetica and Adaptix are convergent and we see potentially large benefits in combining their approaches to market in technology, software and distribution channels, amongst other initiatives. Financial Performance Key Performance Indicators The Group uses a number of financial key performance indicators to monitor the business, as set out below (all items are "from continuing operations"). Revenue: 14.5% increase - underlying organic growth continues Group continuing revenue increased to £156.4m (2024: £136.6m), driven primarily by organic growth of £18.5m (13.9%) in the AES division. Gross margin: Stable despite some OEM/AM mix effects in the year. Group gross margin reduced slightly to 31.7% (2024: 32.2%) resulting from the relatively higher percentage of OEM sales in the year, versus FY24. Profit margin: 19% increase - ahead of expectations Adjusted EBITDA (note 4) increased to £16.7m (2024: £14.0m). The result was better than expected with AES recording a 20% uplift in adjusted EBITDA across the division, offset by a smaller than forecast investment in the MII division. Operating profit was £8.0m (2024: £5.6m), predominantly due to a £4.3m improvement in EBIT at AES (39%) offsetting £1.7m increased costs (lower than forecast) in MII (Adaptix) and lower restructuring costs. Tax: Future profits and cash protected by available losses The effective rate of taxation at Group level was an 8.7% (2024: 24.4%) tax charge. The utilisation of brought forward tax losses in the UK (note 9) kept the charge lower than expected. There was also a prior year tax refund in the US and foreign profits taxed at a lower rate than that in the UK. The tax position will be aided further in the coming years by utilisation of losses in the UK and US. We continue to be cautious, for example by not recognising all of the potential trading tax losses in the UK. Adjusted diluted Earnings per Share (EPS) increase due to strong AES results Adjusted diluted earnings per share from continuing operations (note 11) increased to 23.7p (2024: 18.5p) reflecting the strong underlying growth in AES results, and lower tax charge offsetting the investment in the MII division. Adjusted diluted earnings per share attributable to shareholders increased to 23.7p (2024: 18.5p). Basic and diluted earnings per share attributable to shareholders from continuing activities increased to 18.9p (2024: 11.1p) and to 18.6p (2024: 10.9p), as above, due to strong underlying growth in AES results, lower restructuring costs and lower tax charge offsetting the investment in Medical. Financial Performance (continued) Funding and Liquidity: Modest net debt increase Net debt (including IFRS16 debt) at 31 May 2025 was £16.9m. Excluding IFRS16 debt, Net debt was £12.3m (31 May 2024: Net debt (including IFRS16 debt) was £11.8m and excluding IFRS16 debt was £6.1m). The cash flows generated from the improved underlying profits were reduced by a £1.1m working capital outflow, a figure much lower than would be expected for the 14% increase in revenue, resulting in an operating cash inflow of £11.5m for the year (2024: £1.3m). As expected, there was significant investment in product development during the period with £11.5m invested, primarily in relation to Magnetica's compact helium-free MRI system £5.9m, Adaptix's disruptive 3D X-ray technology £3.6m and next generation nuclear pumps at HTI £0.8m. A further £2.8m was invested into property plant and equipment. To support the significant investment in the business, the group drew down a modest£1.1m net of repayments from its supportive banking partners, leaving the Group in a strong position to pursue its strategy. The Directors consider that the Group has sufficient financial resources to deliver its strategy, with the Group continuing to actively look for further value enhancing opportunities. Dividend: Progressive dividend policy continues A final dividend of 3.0p per share is proposed, making a total dividend of 4.9p per share (2024: 4.7p). The dividend will be paid on 19 December 2025, to shareholders on the register at 7 November 2025. Principal risks and uncertainties facing the Group Managing Risk The Group is exposed to a range of risks and uncertainties that could materially affect its performance and financial position. The Board is responsible for overseeing risk management and sets the Group's risk appetite based on the nature of each risk. The Audit Committee and Chief Financial Officer regularly review the Group's risk register. Effective risk management helps protect our shareholders and stakeholders while enabling sustainable growth. We aim to embed risk awareness into core business processes across our operating units and continue to refine our approach each year. Risk Management Process The Group uses a risk register to help coordinate its risk management process. The risk register identifies the key business risks and documents the policies and practices in place to mitigate those risks. Principal Risks The principal risks identified by the Directors under these groups are set out in the table below. The risks considered during the Group-wide risk management process cover a wider range of issues than the key risks that are listed in this table. Risk Potential Impact Mitigation A. Growth Strategy A fundamental part of the Group's strategy is growth from both Original Equipment and Aftermarket sales. The growth is reliant on our markets. These markets demonstrate long-term growth but remain highly competitive and can be cyclic. The Group provides niche engineering solutions for the global energy and medical sectors. It has an excellent market profile (quality, reliability and customer relationships), which results in inclusion on sector bid/quote opportunities. The Group has invested, and is investing, in key aspects to maintain and improve the Group's competitive position including: Failure to generate sufficient order intake and revenue to cover the fixed cost base could give rise to lower profit and cash generation that constrains the Group. Failure to keep-up with technological change could give rise to the Group's products, services and technologies becoming less competitive. employees (see E below); supply chain (see F below); developing and maintaining strong relationships with key customers; capital expenditure on plant and equipment; research and development concerning products and processes and aftermarket initiatives, including supporting end-of-life extension programmes. Risk Potential Impact Mitigation B. PIE Strategy mergers, acquisitions and disposals The Group makes regular acquisitions and disposals under its PIE strategy. In August 2023, it acquired the assets of Slack & Parr and in September 2023, it acquired the remaining 82% of Adaptix. Failure to re-establish and rebuild these businesses could (1) absorb a disproportionate part of management resource at the expense of other parts of the Group (2) reduce the Group's profitability and (3) delay the cycle of the planned positive outcome of the PIE strategy. The Group carefully plans acquisition actions to mitigate this risk: extensive pre-deal due diligence; achieving a balance between attractive purchase prices and business purchase agreement terms and conditions; post-acquisition integration planning; rapid business restructuring as required; appropriate funding of the acquisitions and on-going businesses followed by de-leveraging the business; establishing senior management teams, complemented by experienced executives from Avingtrans and externally, if required; development of incoming employees; focusing on marketing and sales, including growing aftermarket businesses; and investing in the businesses as necessary for a successful outcome to the PIE strategy. C. Execution The Group designs, manufactures and services highly technical products that are mission critical to the end user. Failure to satisfy contractual obligations could give rise to significant losses (e.g. warranty claims, liquidated damages, etc), cash constraints, lost future orders and adverse impact on the Group's reputation. The Group continues to invest consistently in its people, processes and products, to maintain and improve lead times and product innovation. These steps include: enhanced customer relationship management, sales and operational planning, process flow mapping, research and development, product standardisation and enhancing process capability. The Group also seeks to minimise the impact of execution risk through its terms of trade, such as: (1) limiting the undertakings it gives to pay liquidated damages and (2) avoiding consequential damages altogether. D. Global Economic Activity and political uncertainties including Energy cost The Group operates in global energy, industrial, defence, infrastructure and medical markets. A slowdown in those markets, including the possible impact from on-going economic and political uncertainty, may adversely impact order intake, liquidity needs, and terms of trade and the financial performance of the Group. Global uncertainty, such as the Ukraine conflict, can have significant impact not only on resource pricing but also on decisions by our customers to invest and therefore impact on our trading. The Group has a diversified geographical and sector spread, which reduces the impact of localised economic trends and activities. In addition, the Group is investing in research and development, to develop new products, or adapt existing products, for use in other applications, in order to broaden its product offering, and to reduce the risk. Increasing aftermarket activities also provide the Group with a partial cushion to defend against cyclical downturns in original equipment purchasing. We continue to review and assess the potential impacts of the Ukraine conflict and the global geopolitical situation. We are engaged with trade associations, which are in contact with government and can thus assist our decision making and action plans. The overall trend towards Energy security is anticipated to generate more reward than risk. Shorter term validity of quotes, due to rapid changes of energy, materials and parts pricing and pass through contracts, helps to mitigate the long term trend of increased resource prices. Risk Potential Impact Mitigation E. Employees Attracting and retaining talented people is a Group priority to ensure our continued success. The Group has numerous skilled and highly trained and qualified employees who demonstrate their commitment to the Group through the continuous improvement of our products, processes and procedures which impacts on the Group's performance. Failure to attract the right talent, could inhibit the rate of product and process development as well as impact on the Group's performance. Recruitment and retention of employees is a key focus for the Group to ensure its continued success. Group mitigating actions include: continuing the significant investment in training and development; personal development reviews; succession planning; promotion from within where possible; outreach to Universities, Colleges and Local Schools; monitoring pay and benchmarking; maintaining the successful graduate and apprentice programmes; improving overall employee engagement; and utilisation of external and Group resource to offset any temporary gaps in key personnel. F. Supply Chain The Group is reliant on its supply chain as part of its aim to improve throughout and optimise stock-holding. Failure of that supply chain can result in operational disruption and delays to shipments to customers, leading to potential loss of profit and damage to customer relationships. Each division and business has its own sourcing policy. Where appropriate and efficient, businesses cooperate on sourcing. Mitigating actions include: sourcing strategies to avoid single point dependence for any key commodity and standardisation to support possible stock holdings; identifying in-house capability (intra and inter-divisionally) and focused investment in related capital expenditure; exception reporting, operational planning and review processes support the early identification of risks; monitoring of supplier performance; an optimum number of suppliers with strategic, long-term partnerships on key components; strengthening of supply chain teams; and supply chain benchmarking and development. monitoring of macro-economic factors (e.g. trade policy changes, tariffs) G. Cyber security A cyber-attack or data breach could lead to theft of sensitive information, operational disruptions, or financial loss. Our exposure includes risks to our intellectual property, personal data (of employees or customers), and industrial control systems. The threat environment is constantly evolving, with increasingly sophisticated cyber-crime. The Group has invested in strengthening its cyber defences and IT management. We maintain up-to-date security measures including firewalls, network monitoring, and regular vulnerability assessments. Notably, several of our UK and US businesses carry government backed cyber security accreditations to validate our controls against cyber threats. We have continued to upgrade servers and operating systems to supported, secure versions and improved our backup/disaster recovery processes. Employee awareness is also key and we run training programmes tailored to the individual needs of our businesses. Risk Potential Impact Mitigation H. Financial Liquidity and Funding The Group must maintain sufficient financial resources to meet its obligations and pursue growth. There are two facets to this risk: short-term liquidity (having enough cash and working capital day-to-day) and long-term funding capacity (ability to refinance debt or raise new capital when needed). Specific risk factors include: interest rate changes impacting our cost of borrowing, covenant compliance on our credit facilities, and the cash demands of growth (higher working capital tied up in inventory or receivables as the business expands). We take a proactive approach to managing liquidity. The Group performs rigorous cash forecasting - including a rolling 13-week cash flow forecast updated monthly, and longer-term projections updated quarterly. This forecasting discipline allows us to anticipate and address any funding shortfalls well in advance. We maintain committed bank facilities in the UK and US, and we have diversified sources of capital. We regularly review the funding structure with our strategic partners to ensure they are appropriate. In FY2024, we refinanced and repaid certain loans, leaving the Group with a simplified debt structure and no near-term maturities. We also focus on internal cash generation: enforcing standard payment terms (customers are asked to make stage payments on large contracts to fund work-in-progress), actively managing receivables and payables, and optimizing inventory levels. Additionally, the Group's balance sheet is managed conservatively. We avoid excessive leverage and retain a cushion of available liquidity. I. Currency The Group operates and sells in overseas markets that may utilise currencies other than those in which its principal costs are denominated. The exposure to foreign exchange rate fluctuations may, as a result, affect the Group's cash flow. The Group's policy is to hedge its transaction exposures (i.e. cash flows) where a significant commitment has been made and a level of cover for non-contracted flows in the 12 to 24 month period. Currency hedging lines are available from two providers. There are no hedging requirements currently needed. J. Pension Scheme The Group maintains a defined benefit pension scheme related to the Hayward Tyler businesses. The Group could be required to increase its contributions, to cover funding shortfalls caused by poor investment performance of scheme assets, a deterioration in the discount rate, or inflation rate applied and changes in life expectancy of members of the scheme. The scheme is closed to new members and to future benefit improvements. The performance of the investment advisers is monitored closely by the Company and pension trustees and action taken where that is not satisfactory. The assumptions used to determine the pension deficit/surplus are based on recommendations of the actuary to the scheme, benchmarked against market norms by an expert 3rd party. The Directors discuss the pension scheme regularly and there is frequent contact with the pension fund trustees. The aim is to strengthen the financial position of the Group, through its underlying performance, which assures stakeholders and helps to maintain, or reduce contributions, to cover any eventual funding shortfall. The plan trustees have selected a liability driven investment strategy aimed at reducing interest and inflation rate risks and providing a return that matches, or exceeds the growth in projected pension plan liabilities. Risk Potential Impact Mitigation K. Customer Credit Exposure The group may offer credit terms to its customers, which allow payment of the debt after delivery of the goods or services. The group is at risk to the extent that a customer may be unable to pay the debt on the specified due date. We strive to diversify our customer base in each division, pursuing new customers and markets so that we are not overly reliant on a handful of clients. For existing key customers, we invest in strong account management and customer service to deepen relationships - the aim is to become a trusted longterm partner, making it less likely they would leave Avingtrans without cause. Many of our larger contracts are with government or government-backed organisations, such as HS2 and Sellafield, which significantly reduces the Group's overall credit risk profile. See note 24 for more detail. L. Climate change and sustainability Climate change presents both risks and opportunities for the Group. On the risk side, environmental regulations and the global shift towards a low-carbon economy could affect our operations and markets. For instance, rising energy costs, carbon taxes, and emissions caps may increase our operating expenses or restrict certain industrial activities. Customers are also transitioning away from fossil fuel-based systems, which could lead to declining demand for traditional product lines unless we innovate. An emerging concern is electricity grid instability. The shift towards renewable energy sources (such as wind and solar) introduces intermittency into the energy supply, and in some regions this has led to grid reliability issues. We are taking a proactive approach to sustainability and climate-related risk management. The Group continues to invest in low-carbon technologies, including helium-free MRI systems, high-efficiency motors and pumps for nuclear and other clean energy markets. Operationally, we are improving energy efficiency and resilience across our sites. This includes installing additional insulation, upgrading boilers and heating systems, and switching to LED and smart lighting solutions. We actively monitor energy usage across the Group and encourage employees to identify and implement local energy-saving initiatives, recognising that many effective improvements are driven from the ground up. The Group has also established an Environmental, Social and Governance (ESG) Committee, chaired by Non-Executive Director Jo Reedman. The committee meets quarterly and oversees the Group's climate strategy, disclosures, and wider sustainability initiatives. This governance structure ensures that environmental and social risks are regularly reviewed at Board level and integrated into our long-term decision-making. People There were no personnel changes at Board level in the period. We are delighted to announce that Austen Adams, Divisional Managing Director of AES, will be joining the Board in the position of Group Chief Operating Officer. This is expected to be approved at the AGM in November 2025. A further announcement will be released upon his formal appointment, including the required regulatory disclosures. At business management level, there have been a number of appointments to strengthen local teams, as we seek to maximise the potential of our businesses. In addition, we continue to strengthen the apprenticeship and graduate programmes in our businesses, striving to attract the best new talent, and allowing us to plan and build for the future. Section 172 statement Background The Board of Avingtrans has put in place appropriate measures to enable it to understand and comply with its shared and individual responsibilities under Section 172 of the Companies Act 2016. Each director understands their obligation to act in a way they consider is in good faith and would be most likely to promote the success of the Company for the benefit of its members as a whole. In making decisions on behalf of the Company, Board members carefully consider: the likely consequences of any decision in the long term; the interests of the Company's employees; Section 172 statement (Continued) Background (Continued) the need to proactively foster the Company's business relationships with suppliers, customers and others; the impact of the Company's operations on local communities and the environment; the desirability of the Company maintaining a reputation for high standards of business conduct; and the need to act fairly between members and stakeholders of the Company. Appropriate decision making The Board is given regular information concerning the Company's and Group's performance ahead of each Board meeting, along with projections for the future - to assist in the overall planning process - and presentations from business units. Decisions regarding the business (including strategy, market position, investment opportunities, M&A activity, senior management appointments etc.) are fully considered and discussed openly between board members, taking account of each of the considerations listed above. The Board seeks to understand the views and needs of the Group's key stakeholders, to ensure that consideration for all our stakeholder groups is taken account of when decisions are made and to address their long-term needs and concerns. Where there may be competing priorities, the Board considers the commercial, human and broader business impacts against the longer-term sustainability of the business. The balance and experience of the Board to make appropriate decisions is regularly reviewed, as set out in the Corporate Governance Report, specifically principles five and six. Stakeholders Avingtrans has identified its main Stakeholders as being its: shareholders; customers and suppliers; employees; and the wider communities we operate within Engaging with our stakeholders strengthens our relationships and helps us to make better business decisions and deliver on our commitments. The Board is regularly updated on feedback from wider stakeholder engagement, to stay abreast of the issues that matter most to them and our business, and to enable the board to understand and consider these issues in any decisions made. Details can be found in the Corporate Governance Report, specifically principles two and three regarding stakeholder engagement. Key decisions made during the period During FY25, several decisions were made about the strategy, structure and future of the business. Examples of these key decisions relate to: Further investment in Magnetica Further investment in Adaptix Agreement of further contracts with HS2 Expansion of defence work Next generation nuclear power, AI and data centre infrastructure Further investment in Magnetica In order to continue the development of the Medical division and its compact helium-free MRI technology, the Board considered further investment in Australian based Magnetica, to develop and manufacture lower cost, helium-free MRI scanners, ensuring clinical interoperability for imaging extremities. Helium-free technology should facilitate an expansion in potential to locate systems in more local facilities, by eliminating infrastructure costs. This could allow repurposing of whole-body scanners to more appropriate imaging tasks and through targeted use of AI, free-up radiologists' time and capacity. Further investment Adaptix The Group continued to progress the development of Adaptix's innovative low-dose, portable, 3D X-ray technology during the year. Investment in engineering, prototype enhancement, and regulatory preparation is supporting the enhanced FDA 510(k) submission and future market launch. These developments strengthen our position in the global medical imaging market and align with our long-term growth strategy. By advancing Adaptix's product roadmap and securing its first US distributor, we are creating opportunities for sustainable value creation for patients, healthcare providers, and shareholders alike. Section 172 statement (continued) Disposal costs During the period, the business decided to write off costs associated with a prospective disposal of a subsidiary following an extended period of negotiations. These were aborted when the PE acquiror could not raise sufficient banking arrangements from its banking partners to complete the process. The Board decided it was not in our Stakeholders interest to further invest resources in extended negotiations given the fundamental financing issue of the acquiror. Agreement of further contracts with HS2 The Group, through its Booth Industries business, took the strategic decision during the year to secure additional contracts in support of the HS2 programme. This decision reflects our confidence in Booth's specialist capabilities and the long-term opportunities within the UK infrastructure sector but also increases our customer concentration in the near term. While mindful of the associated risk profile, the Board considered that the scale and strategic importance of HS2, together with Booth's proven track record in delivering complex, safety-critical doors and systems, would provide a strong platform for future growth. The decision was made in the context of our wider strategy to deepen relationships with key customers and leverage our technical expertise in high-value projects. As a consequence of this contract, the Booth business is developing new products which meet the complex technical requirements needed operate on the HS2 network. Expansion of defence work Within our Hayward Tyler business, we expanded our activities in the defence sector, including work associated with the AUKUS partnership and the Royal Navy's submarine programmes. These contracts draw on Hayward Tyler's long-standing expertise in mission-critical equipment for the most demanding environments, reinforcing our reputation as a trusted partner in national defence projects. The decision to grow our presence in this sector aligns with the Group's strategy to diversify into high-value, long-duration programmes that provide stable revenues and strengthen customer relationships. The Board carefully considered the long-term commitments and capability requirements before proceeding, recognising the significant opportunities for sustainable growth and value creation for stakeholders. Next generation nuclear power, AI and data centre infrastructure Avingtrans is very well positioned to capitalise on two of the fastest-growing, strategically vital technology sectors - namely, next-generation nuclear power and AI/data centre infrastructure. Our proven expertise in nuclear engineering provides a strong base to build upon, to take advantage of these opportunities. Alongside the global momentum in Small Modular Reactors (SMRs) & Gen-IV reactors, there has been explosive demand for reliable power & advanced cooling of data centres, with nuclear-powered AI clusters emerging as a model. Accordingly, Hayward Tyler has been investing in novel pump technology for customers such as TerraPower and a number of other SMR OEM developers; Ormandy has been investing in cooling systems for data centres; Metalcraft and Scientific Magnetics have been investing in technology for quantum computing; and Booth has been investing in high integrity door designs for SMRs and data centres. Section 172 Summary Overall, the Board considers that the Company's approach to compliance with Section 172 is appropriate for an organisation of our size and the breadth and nature of stakeholders we have. Where significant decisions are made, a key element of the decision-making process is how each of the key stakeholders may be impacted. The Board ensures that the needs of shareholders are balanced with those of our customers and suppliers and those of our employees, by carefully considering the impact (positive and negative) of such decisions. Alongside a healthy approach to risk management, our policies and ways of working are intended to drive an appropriate balance of risk and reward across the business. Combining our Core Values and Code of Conduct into our decision-making, we can drive a Company/Group culture, which aligns to the key requirements of S172, delivering benefit to all Stakeholders. Sustainability report Avingtrans believe that operating in a safe, ethical and responsible manner is at the heart of creating sustainable value for all our stakeholders. Environment As the Group is listed on the LSE AIM market, we fall within the Climate-Related Financial Disclosures ("CRFDs") regime. The four pillars of this regime are governance, strategy, risk management, and metrics and targets. Governance The Group established an ESG Committee, Chaired by Jo Reedman (Non-Executive Director).An overview of the Committees responsibilities is set out in the Corporate Governance Report (page 25) Strategy In 2021, we reassessed our approach to sustainability, with a view of integrating a sustainability strategy into our core business activities, aligning ourselves with the UN's Sustainable Development Goals (SDGs). From our sustainability assessment we identified two principal areas of environmental focus, these are: Operational eco-efficiency Development of new technologies Operational eco-efficiency looks at improvements we can make at a site level, including reducing the manufacturing footprint of our sites, investment in improvements, and establishing a culture which promotes carbon reduction. Development of new technologies allows us to benefit from opportunities designed to mitigate issues associated with climate change. The Group can benefit from its advanced engineering capabilities and world-class technologies to develop new products and services that support low carbon or reduced emissions requirements. Risk management Our approach to identifying, assessing and managing environmental risks, including climate related risk, is embedded within our approach to risk management. Environmental risks may present as financial or non-financial risks depending on the extent to which their impacts can be quantified, and how they have been classified. Climate change and environment is a principal risk for the Group (see page 13). Climate-related risks and opportunities A summary of the climate-related risks and opportunities identified as having a potentially material impact on the Group, and our associated controls, includes: Shift to renewables The global transition away from fossil fuels towards renewable and low carbon energy sources continues to gather momentum. While this long-term shift may reduce demand for certain products within our hydrocarbon focused portfolio, it also presents significant opportunities in areas aligned with the energy transition. In response, the Group has been actively investing in technologies that support the future of clean energy. These include products designed for next generation nuclear applications, such as fusion energy, molten salt fast reactors, and small modular reactors. Extreme weather events Disruption may arise from a range of climate-related events, including flooding, extreme temperatures, and drought. Elevated temperatures can lead to increased energy consumption for heating and cooling our facilities, and in more severe cases, may result in site closures and broader logistical challenges. These risks are becoming more evident across the Group. For example, we have observed record levels of smog in Delhi, India, in recent years, driven by prolonged drought conditions and industrial emissions. Regulation The Group operates in a highly regulated environment across many jurisdictions and is subject to regulations relating to environmental factors including, but not limited to, climate change, therefore consideration of current and emerging regulation within our environmental management system is key to mitigating risk. Identified regulatory risks include energy-related taxes and the increased costs of compliance with energy-related schemes. Scenario analysis We have conducted peer analysis to understand the number of different scenarios businesses are modelling. We have found that most peers are modelling 2 scenarios, which are: 1.5 C by 2100: Orderly transition to the Paris-aligned goal occurring by 2100, with temperature rising 1.5 C above pre-industrial levels. Climate-related risks and opportunities (Continued) Scenario analysis (Continued) 4.0C by 2100: Failure of countries to meet their Paris-aligned goals, resulting in higher emissions and temperatures rising to an average of 4 degrees Celsius above industrial levels. Some of our peers have gone further, by analysing higher temperature rises or no rise at all. Presently we think the 2 scenarios above are sufficient for giving readers an opportunity to understand the possible transformational effects of climate change. We will continue to assess the appropriateness of our scenarios and will likely alter them over time to reflect a changing environmental landscape and to ensure comparability with our peer group. Our analysis of physical climate risks is aligned with recognised climate scenarios, specifically the Intergovernmental Panel on Climate Change's (IPCC) Representative Concentration Pathway (RCP) scenarios which provide a uniform framework for exploring potential climate changes and related impacts. RCPs are used globally for climate modelling and give access to a wide range of peer-reviewed and accepted climate datasets, as well as allowing consistency across territories. 1.5°C Scenario Under this scenario, a rapid and coordinated global effort successfully limits warming to 1.5°C. The transition is characterised by aggressive decarbonisation policies, technological innovation, and investment in low carbon solutions. For Avingtrans, this scenario presents a positive demand outlook for our nuclear-related products and services, driven by increasing adoption of low carbon baseload energy. Our businesses support a number of next generation nuclear technologies, including fusion (e.g., ITER in France) and molten salt fast reactors (e.g., TerraPower in the US). We expect this trend to support robust medium-term demand, followed by longer-term aftermarket opportunities. By contrast, we anticipate a gradual decline in demand for new oil and gas capital equipment. Older infrastructure may remain in use longer, sustaining a tapering demand for aftermarket support. Our new compact MRI system, which operates without liquid helium, is aligned with this low carbon transition. It reduces both energy usage and reliance on non-renewable resources, improving our competitive positioning in the medical imaging market. However, a broad shift to renewables could also drive increased operational costs, particularly for energy-intensive manufacturing. Some of our locations, such as Hayward Tyler Inc. in Vermont, are more resilient due to access to low carbon electricity. We will continue to model and monitor these impacts as part of our ongoing scenario development. 4.0°C Scenario This scenario assumes that governments fail to implement effective climate policies, leading to a rise in global temperatures of up to 4°C by 2100. Energy transition occurs slowly, prolonging reliance on fossil fuels and increasing exposure to severe physical climate risks. For Avingtrans, this scenario poses heightened operational and supply chain risks. Higher temperatures, water stress, and extreme weather events could disrupt operations at certain sites, increase maintenance costs, and impact worker health and safety. We are already seeing early indicators of such impacts, including record levels of smog in Delhi, India, linked to drought and industrial emissions. If unaddressed, these risks could increase insurance costs, affect productivity, and require investment in adaptation measures. Metrics and targets The Group has adopted the following targets: Establish carbon reduction plans at all sites across the Group Report energy consumption and carbon emissions annually Integrate environmental considerations into our Pinpoint-Invest-Exit strategy Carbon reduction plans Carbon and energy reduction targets have been established at a site level. Most sites have established targets and strategies as part of their ISO 14001 Environmental Management System accreditation. Our Booth subsidiary is leading the way, on net zero in the prior year (Scope 1 and 2). Reporting energy consumption and carbon emissions We report greenhouse gas Scope 1, 2 emissions in line with the Streamlined Energy and Carbon Reporting (SECR) regulations. Given the Group makes regular disposals and acquisitions, we do not consider absolute carbon emissions to be an appropriate method for tracking emissions, instead we focus on carbon intensity ratios. We have adopted a portfolio approach to tracking carbon emissions. For the division operating in the energy sector (AES) we monitor carbon emissions per £m of revenue. The Medical division (MII) has a greater focus on product development, so instead we focus on emissions per employee. Environment (continued) Metrics and targets (continued) Reporting energy consumption and carbon emissions (continued) Sites track their energy usage from a number of sources, including meter readings, mileage reports, and invoices, then converts these inputs to energy (kWh) and carbon emissions (tCO2e) using relevant conversion factors. Conversion factors are published by the UK Department for Environment, Food and Rural Affairs and the US Environmental Protection Agency (EPA). Our energy usage and carbon emissions are: AES 2025 MII Group AES 2024 MII Group Scope 1: Gas 775 28 803 715 38 753 Oil 538 - 538 427 - 427 Distribution 88 1 89 27 1 28 Company vehicle travel 8 - 8 20 - 20 1,409 29 1,438 1,190 39 1,229 Scope 2 - Purchased electricity 1,310 234 1,544 1,307 230 1,537 Total emissions tCO2e 2,719 263 2,982 2,497 269 2,766 Total energy consumption mWh 13,285 814 14,099 11,684 755 12,439 Intensity metrics: Average employees 858 142 1,008 840 93 941 Emissions tCO2e per employee 3.2 1.9 3.0 3.0 2.9 2.9 Revenue (£m) 151.5 4.9 156.4 132.9 3.7 136.6 Emissions tCO2e per £m of revenue 17.9 53.2 19.1 18.8 73.1 20.2 UK proportion of: Total emissions tCO2e 80% 39% 77% 81% 34% 76% Total energy consumption mWh 81% 66% 80% 81% 59% 80% In compliance with the SECR guidance, electricity emissions are based on grid averages from the regions we operate. As entities within the Group have transitioned to obtaining their power through renewable energy providers our actual electrical emissions will be lower. In our Advanced Engineering Systems (AES) division, the key carbon intensity metric is emissions per £m of revenue. In 2025, this reduced to 17.9 tCO 2 e/£m (2024: 18.8), primarily due to revenue growth delivered without a corresponding increase in our manufacturing facility footprint. In our Medical & Industrial Imaging (MII) division, the focus remains on reducing emissions per employee. This metric improved to 1.9 tCO 2 e per employee in 2025, compared to 2.9 in the prior year. Integration of environmental considerations into our Pinpoint-Invest-Exit strategy The Group has expanded upon its environmental due diligence procedures, which historically used to focus on potential environmental liabilities. The focus has now shifted towards identifying opportunities to improve business performance through energy reduction initiatives. We strongly believe that investing in next generation manufacturing facilities and development of new technologies is key to generating a sustainable business for the long term. Demonstrating to potential buyers our environmental credentials and technological capabilities is a key component of our Exit strategy. Progress in the year Operational eco-efficiency A significant proportion of the Group's energy consumption is spent heating premises over the winter months. At some of the older facilities energy in the winter months (December, January and February) can be as much as 4 times higher than over summer (June, July and August). A focused effort has been made to reduce winter energy consumption. This includes the installation of new boilers, additional insulation, automatic timers on heating, as well as reducing the manufacturing footprint. We carried out a Carbon whole life cycle impact assessment also known as the LCA to measure embedded carbon in some of our key products. This process was guided by the ISO 14067 Lifecycle Carbon Assessment ("LCA") to measure and investigate Environment (continued) Progress in the year (continued) Operational eco-efficiency (continued) improvement opportunities that can cut carbon emissions. On the back of this research, we have implemented a number of improvements to our products and processes including: Selection of higher quality materials, designed to increase the useful life of products and reduce maintenance. Introduction of reusable packaging and packaging which can be fully recycled. Negotiating with customers to make fewer, larger shipments of products, in order to reduce delivery emissions. Development of new technologies Next generation nuclear: Molten Chloride Fast Reactor Our US Hayward Tyler business has been developing high-temperature molten salt pumps, destined for a state-of-the-art Integrated Effects Test (IET) facility, under development by Southern Company and TerraPower, to advance development of the Molten Chloride Fast Reactor (MCFR). This is a transformational, fourth-generation, molten salt nuclear technology, designed to enable low-cost, economywide decarbonization. Located at TerraPower's Everett, Washington facility, the IET is a non-nuclear, externally heated multi-loop system, intended to test and validate integrated operation of MCFR systems, as well as demonstrate multiple auxiliary MCFR functions. Nuclear energy and decommissioning represent 20.9% of the Group's revenues in the year. The Group believe that working on next generation nuclear projects including MCFR in the US, ITER in France, and Small Modular Reactors ("SMRs") in the UK and the USA, will strengthen the Group's long-term position in the nuclear industry. Helium-free magnets Existing MRI systems rely on liquid helium, to cool the superconducting magnets at the heart of each system. Helium is a scarce, non-renewable resource, mostly obtained as a by-product of oil extraction. Therefore, in our new compact MRI designs, we are seeking to take advantage of the smaller system footprint, to enable us to rely on mechanical cooling only, thus virtually eliminating use of helium in these systems. An update on the status of the progress on the MRI development can be found in Medical Division review on page 8. Social Social Responsibility It is paramount that the Group maintains the highest ethical and professional standards across all of its activities and that social responsibility should be embedded in operations and decision making. We understand the importance of managing the impact that the business can have on employees, customers, suppliers and other stakeholders. The impact is regularly reviewed to sustain improvements, which in turn support the long-term performance of the business. Our focus is to embed the management of these areas into our business operations, both managing risk and delivering opportunities that can have a positive influence on our business. Employees The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them directly and on financial and broader economic factors affecting the Group. The Group regularly reviews its employment policies. The Group is committed to a global policy of equality, providing a working environment that maintains a culture of respect and reflects the diversity of our employees. We are committed to offering equal opportunities to all people regardless of their gender, nationality, ethnicity, language, age, status, sexual orientation, religion or disability. We believe that employees should be able to work safely in a healthy workplace, without fear of any form of discrimination, bullying or harassment. We have rolled-out "dignity and respect" training programmes across the Group. We believe that the Group should demonstrate a fair gender mix across all levels of our business, whilst recognising that the demographics of precision engineering and manufacturing remain predominantly male, which is, to an extent, beyond our control. Apprenticeships and training All larger Group locations are running apprenticeship schemes for young people, both to act as socially responsible employers and to optimise the demographics of our workforce over the mid to long term. The apprentice training school, based at Metalcraft, Chatteris continues to be successful. We are partnered with West Suffolk College (WSC), as the operator and training provider at the centre, which plans to take on between 80 and 130 students each year. Construction of the centre was funded through a £3.16 million grant from Cambridgeshire and Peterborough Combined Authority. The Group continues to be recognised nationally for the strength of its apprenticeship training schemes. At 31 May 2025, the Group had 37 apprentices, of which 35 were in the UK and 2 in USA. Social (Continued) Health, safety, and wellbeing The Group takes H&S matters and its related responsibilities very seriously. As regular acquirers of businesses, we find different levels of capability and knowledge in different situations. A frequent investment need in smaller acquisitions is to spread H&S best practice from other Group businesses and bring local processes up to required standards. Larger acquisitions usually have well developed H&S processes, and we seek to learn from these in other business units. Employee equality, welfare and engagement are critical for developing our key asset. We focus on pro-active actions, including, internal training, certifications, and employee engagement through listening, survey and involvement. Our Health and Safety KPIs can be found in the key performance indices section of the strategic report (page 6). We are pleased to report a reduction in Health and Safety incidents during the year, with employee incidents per head falling from 0.07 in 2024 to 0.05 in 2025. In absolute terms, there were 53 employee incidents reported in the year, down from 68 in the prior year. Importantly, there were no fatalities, or serious injuries at any of our sites, in either period, and no injuries involving contractors in the current, or prior year. At Board level, Les Thomas has H&S oversight and he conducts inspections with local management, as appropriate. Ethical policy The Group complies with the Bribery Act 2010. We do not tolerate bribery, corruption or other unethical behaviour on the part of any of our businesses or business partners in any part of the world. Employee training has been completed in all areas of the business to ensure that the Act is complied with. Outlook Avingtrans is a market leader in specialist engineering markets, primarily in the energy, medical, and industrial sectors. Our tried-and-trusted "PIE" strategy has driven our profitable growth record. Recent acquisitions should enable the Group to further generate long-term value for investors in robust market areas. As we continue to implement our PIE approach, we will remain prudent and work to crystallise value and return capital when the time is right. Our approach has worked effectively for us during recent multi-year uncertainties and we believe will lead to opportunities to further increase shareholder value. The Group continues to invest in both of its divisions, with a particular focus on the global energy and medical markets, to position our businesses for maximum shareholder value, via eventual exits in the years to come. Magnetica's MRI product development continues to make solid progress, albeit further delayed by additional FDA requirements. The expected approval of the orthopaedic product is now anticipated in the H2 FY26, subject to FDA certification in the USA. Magnetica's MRI activity is fully complemented by Adaptix and its disruptive 3D X-ray technology, with products addressing the orthopaedic, veterinary and non-destructive testing (NDT) markets and now with sales beginning to build. The Slack and Parr recovery is progressing to plan and we anticipate a further improvement in performance in the current financial year. As anticipated, the Group remains in a net debt position, though the gearing is not onerous. Our value creation targets continue to be accomplished as planned and are underpinned by our conservative approach to debt. The AES division has a strong emphasis on the thermal power, nuclear and hydrocarbon markets and aftermarkets, as well as defence and critical national infrastructure. The MII division is focused on compact, helium-free MRI systems and compact point of care 3D X-ray systems, which the Board believes could create significant future shareholder value. To drive profitability and market engagement, each division has a clear strategy to support end-user aftermarket operations, servicing its own equipment and (where pertinent) that of third parties, to capitalise on the continued market demand for efficient, reliable and safe facilities. Global unrest and conflicts are still risk factors. However, we have continued to take effective cost and impact mitigation actions, to limit any potential downside and we will continue to be vigilant. Despite the seemingly never-ending macroeconomic uncertainty, our markets continue to grow and M&A opportunities remain a priority for us. Businesses like ours continue to command superior valuations at the point of exit. As ever, the Board remains cautiously confident about the current strategic direction and potential future opportunities across our markets. We will continue to refine our business by pinpointing specific additional acquisitions as the opportunities arise, to create superior shareholder value, whilst maintaining a prudent level of financial headroom, to enable us to endure any subsequent headwinds. The Strategic Report was approved by the Board and signed on its behalf by: Roger McDowell Steve McQuillan Stephen King Chairman Chief Executive Officer Chief Financial Officer 23 September 2025 23 September 2025 23 September 2025 The Directors present their report and the audited financial statements For the year ended 31 May 2025. Matters included in the Strategic report The Directors' consideration of likely future developments in the business, risks and KPI's have been included in the Strategic report. Going concern During the year, the Group has managed its working capital and cash flows prudently and significantly within its available funding headroom. The cash flows generated from the improved underlying profits were reduced by a £1.1m working capital outflow, a figure much lower than would be expected for the 14% in revenue, resulting in an operating cash inflow of £11.5m for the year (2024: £1.3m). As expected, there was significant investment in product development during the period with £11.5m invested, primarily in relation to Magnetica's compact helium-free MRI system £5.9m, Adaptix's disruptive 3D X-ray technology £3.6m and next generation nuclear pumps at HTI £0.8m. A further £2.8m was invested into property plant and equipment. To support the significant investment in the business, the group drew down a modest£1.1m net of repayments from its supportive banking partners, leaving the Group in a strong position to pursue its strategy. The Directors consider that the Group has sufficient financial resources to deliver its strategy. At 31 May 2025, the Group had net debt (including IFRS16 debt) of £16.9m (31 May 2024: net debt: £11.8m incl IFRS 16 as detailed in note 23. Excluding IFRS16, debt at 31 May 2025 was net debt £12.3m (31 May 2024: net debt: £6.1m). Net assets of £113.0m (2024: £113.0m). Additionally, the Group had £9.8m of undrawn committed borrowing facilities - further details are set out in note 22. The Group's system of controls includes a comprehensive budgeting system, with annual budgets approved by the Directors. Monthly monitoring of actual results against budget is standard and the Board perform a regular review of variances. There is also a Quarterly review of the Group's forecasts against actual results and market opportunities /conditions. Annual budgets consist of a consolidated profit and loss, balance sheet and a cash flow for the following 2 years. This is based on local managements' understanding of the markets, customer requirements, supply chains, capability and capacity. This is challenged by Divisional Management to ensure it reflects a reasonable representation of all evidence available. Executive Management examine each Division's budgets in detail, alongside an analysis of risks and opportunities to ensure that they are adequately sensitised across markets/ customers/ contracts /opportunities. Divisional Management present the Budgets to the Board, which evaluates them against it's in depth knowledge of market/economic conditions. These Budgets are then refined and presented for final approval by the Board. Each quarter, local and divisional management update the 2 year forecast with their latest market knowledge and present the updated forecasts to the Executive Management and subsequently to the Board. Key assumptions are applied at a site level, and include a sensitised view of the order pipeline, its conversion and completion, alongside a risk profile for each division, where further sensitivity is applied, as deemed prudent on consolidation. As reported in the Strategic Review, the Group continue to experience some impacts from supply chain during the year, resulting in some delayed orders. These conditions were fully recognised during the budget process, alongside a cautious view of short-term markets, whilst reflecting a restrained view on the trade-out of the current order book and expected beat rate orders. As discussed in more detail in the Chairman's statement and Strategic report, looking into 2026/27 and beyond, the Group has a number of exciting opportunities across all of its operations that should deliver growth and shareholder value. The more recent acquisitions, Booth, Ormandy (HES), continue to deliver robust performances and we anticipate further improvement alongside S&P and Adaptix during FY26 and FY27 with underlying positive results and cashflow helping to underpin the near term Group performance. The Group has met all banking covenants during the year and these are modelled in the budget to ensure forward compliance. The budgets and results are regularly reviewed with the Group's principal bankers to ensure adequate banking facilities remain in place at all times. At the time of writing, the Board expect adequate bank facilities to remain in place throughout the review period. The Board consider these facilities are sufficient for the Group to meet its approved operational and budget plan. However, the Board also consider that, should unexpected conditions arise that had not been already adequately modelled through sensitivities already built into the underlying budget model, that it has the following sources of additional capital: Further bank borrowing against freehold land and buildings - including the Luton site which has outline planning permission; Potential sale and leaseback of freehold sites; Extension of current and re-instatement of previous RCF facilities; Extension of borrowing against the debtor book; and Issue of new shares on AIM Going concern (continued) The detailed cash flow forecasts for the Group for the period extending to 31 May 2027, indicate that the Group expects to have adequate financial resources to continue in business and work within its current banking arrangements, to deliver on its near-term strategic objectives. In the quarter since 31 May 25 the Group has generally performed as expected. Coupled with an ongoing supportive relationship with the Group's principal bankers and the fact the Directors have not identified any material uncertainties that may cast significant doubt on the ability of the company to continue to operate as a going concern, the Directors continue to adopt the going concern basis in preparing the Annual Report and accounts. Results and dividends The Group's profit for the year before tax from continuing operations amounted to £6,860,000 (2024: £4,825,000). The Board considers that it is appropriate to propose a final dividend of 3.0p for the year ended 31 May 2025 (2024: 2.9p), taking the total dividend for the year to 4.9 pence (2024: total 4.7p). Substantial shareholdings As at 23 September 2025, the following had notified the Company that they held or were beneficially interested in 3% or more of the Company's issued ordinary share capital: Number of shares '000 Percentage of issued share capital owned Harwood Capital 4,030 12.2% Business Growth Fund 2,363 7.1% Funds managed by Downing LLP 1,957 5.9% Funds managed by Unicorn Asset Management Limited 1,830 5.5% Funds managed by TrinityBridge Asset Management LLP 1,796 5.4% Funds managed by JTC Employer Solutions Trustee Limited 1,703 5.2% R S McDowell's Pension Fund 1,406 4.3% Directors and their interests The present Directors of the Company and those that served during the year are set out on page 1. Their interests in the share capital of the Company are set out below. Ordinary shares of 5p each 31 May 2025 31 May 2024 R S McDowell 1,406,409 1,406,409 S McQuillan 468,987 468,987 S M King 411,938 411,938 L J Thomas 16,000 16,000 Share options The Directors interests with respect to options to acquire ordinary shares are detailed in the Report of the Directors on Remuneration Interests in contracts No Director was materially interested in any contract during the year. Financial instruments The Group's operations expose it to a variety of financial risks including the effects of changes in interest rates on debt, foreign currency exchange rates, funding, working capital, pension scheme, credit risk and liquidity risk. The Group's principal financial instruments comprise cash and bank deposits, bank loans and overdrafts and obligations under finance leases together with trade receivables and trade payables that arise directly from its operations. The Group enters into derivative foreign exchange transactions where it has certainty of the outcome, however there is no current requirement. Information about the use of financial instruments by the Group and the Group's financial risk management objectives and policy disclosures is given in notes 22 and 24 to the financial statements. Research and development During the year £11,482,000 (2024: £8,430,000) of development costs (per note 13) were capitalised as intangible assets. This was predominately at the Magnetica sub-group for helium free niche MRI application designs, at Adaptix for disruptive 3D X-ray technology and next generation nuclear pumps at HTI. Disabled persons The Group gives full and fair consideration to applications for employment from disabled persons, where they have the necessary abilities and skills for that position, and wherever possible will retrain employees who become disabled, so that they can continue their employment in another position. The Group engages, promotes, and trains staff on the basis of their capabilities, qualifications and experience, without discrimination, giving all employees an equal opportunity to progress. Directors' indemnities The Company has taken out directors' and officers' liability insurance for the benefit of its Directors during the year which remains in force at the date of this report. Employee involvement It is the policy of the Group to communicate with employees by employee representation on works and staff committees and by briefing meetings conducted by senior management. Career development is encouraged through suitable training S172 - promotion of the success of the Company The members of the Board consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006) in the decisions taken during the year ended 31 May 2025. The Company's section 172 statement can be found in the Strategic Report on pages 13 to 15. Statement of Directors' responsibilities for the financial statements The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the group financial statements in accordance with UK-adopted international accounting standards and the company financial statements in accordance with Financial Reporting Standard 101 ('FRS 101'). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group for that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market. In preparing these financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and Group will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's and Group's transactions and disclose with reasonable accuracy at any time the financial position of the Company and Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors confirm that: so far as each of the Directors is aware there is no relevant audit information of which the Company's and Group's auditor is unaware; and the Directors have taken all steps that they ought to have taken as directors to make themselves aware of any relevant audit information and to establish that the Company's and Group's auditor is aware of that information. Statement of Directors' responsibilities for the financial statements (Continued) The directors are responsible for preparing the annual report in accordance with applicable law and regulations. The directors consider the annual report and the financial statements, taken as a whole, provides the information necessary to assess the company's performance, business model and strategy and is fair, balanced and understandable. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Auditor Cooper Parry Group Limited ("...

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