E2v Technologies' warns of space imaging delays but hikes dividend

E2v Technologies warned that profits for the full year may be "modestly" below expectations due to delays on orders for its space imaging equipment.

Orders for space imaging solutions, which include sensors, arrays and sub-systems for space science, ground astronomy and Earth observation, were delayed in the first half, hitting revenues, and management said likely further delays to the anticipated follow-on orders would drag on trading performance for the financial year.

For the six months ending 30 September, revenue fell to £102.8m from £109m in the previous period and adjusted profit before tax also fell to £11.3m from £15.1m in 2015.

But results reflect an improvement in activity and stronger order intake in the second quarter, while further on the positive side adjusted operating cash conversion was 135%, showing the group’s resilience in challenging trading conditions and cutting net borrowings more than previously targeted to £17.8m from £20.3m.

The group reported strategic progress with an operational improvement plan launched, while increased customer engagement has created a range of new business opportunities and continued cash control.

Adjusted earnings per share fell to 3.6p from 5.2p but the interim dividend per share was lifted 6.25% to 1.7p reflecting directors' confidence in outlook for full year earnings.

Chief executive Steve Blair said: “Whilst we remain cautious about the broader economic environment, the improved order intake in the second quarter supports an anticipated stronger second half performance.

"However, due to the increased possibility of further delays to the anticipated follow on orders in Space Imaging, the board now believes the trading performance for the current financial year may be modestly below our previous expectations.

"We are continuing to build momentum for growth in the areas we have prioritised for investment, and we have put in place solid foundations to provide a platform to deliver a resilient performance in the medium term.”

The share price fell 16.65% to 181.50p at 0935 GMT on Monday.