Science Group swings to loss after acquisition of Frontier Smart Tech

Science Group reported organic business performance in line with its upgraded expectations in its full-year results on Tuesday, with group revenue rising to £57.25m for 2019, from £48.67m.

The AIM-traded firm said its adjusted operating profit slipped to £6.7m for the year ended 31 December, from £7.73m a year earlier, as its operating expenses before adjustments grew to £50.54m from £40.94m.

It swung to an operating loss of £0.18m, however, from a profit of £5.31m in 2018.

Diluted losses per share from continuing operations totalled 4.4p, swinging from earnings of 10.5p 12 months prior, while adjusted diluted earnings per share fell to 11.3p from 14.4p.

On the operational front, Science Group noted the completion of the acquisition of Frontier Smart Technologies, which was funded primarily from its existing cash resources.

It said its restructuring and integration programme was also effectively completed, with the costs being recognised in 2019.

The board said the group had retained a “strong” balance sheet, with “significant” freehold property assets.

Following the cash deployed in the Frontier acquisition, Science Group said it was holding the dividend at 4.6p per share.

“In 2019, the group delivered a consistent operating performance from its organic business activities and completed a major acquisition followed by an accelerated restructuring and integration programme” said chairman Martyn Ratcliffe.

“As a result, the progress of Science Group has continued despite the background of macroeconomic and political uncertainty during 2019.”

Ratcliffe said the strategy of enhancing the organic development of the group through acquisitions had created a financially and operationally resilient organisation.

“The acquisition of Frontier Smart Technologies Group was again funded primarily from the group's existing cash resources, minimising shareholder dilution.

“This strategy has delivered a substantial increase in scale, profit and the asset base of the group, with offices in UK, Europe, North America and Asia, serving a range of vertical markets including medical, consumer, food and beverage and industrial sectors.”

At 1302 GMT, shares in Science Group were down 8.89% at 213.2p.