Sydney, Feb 29, 2008 (ABN Newswire) - Savcor Group Ltd (ASX: SAV) is an industrial technology company specialising in materials technology with its several applications in Advanced Rehabilitation Technology (ART) and nanotechnology coatings used in applications such as mobile phones. Savcor's core customers are the leading companies and utilities in the Australian mining, energy and infrastructure industries (Savcor ART) and the world's leading mobile phone handset manufacturers using its ultra thin vacuum coating services (Savcor FACE).
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Savcor Group Limited (ASX: SAV) is an industrial hi-tech technology business that has established itself as a leader in the application of various surface coatings and structure protection technologies. Savcor today announced a pro forma EBITDA of $27.4 million for the year ended 31 December 2007, an increase of 7.1% over the Prospectus forecast. The company also released its preliminary final report for the period ended 31 December 2007
Commenting on Savcor's first result since listing on the ASX in December 2007, Managing Director Hannu Savisalo said "we are pleased with the performance of the business over the whole year and over the three month forecast period to 31 December 2007. The levels of activity currently being experienced by both the FACE and ART divisions are high".
For the period of three months to 31 December 2007 EBITDA was $6.2 million, slightly ahead of the Prospectus forecast. "The FACE division is experiencing strong volumes albeit at lower margins as a result of a change in the product mix. The expected opening of the 2nd Guangzhou factory in March 2008 will increase the decorative coating business capacity. The ART business is experiencing strong activity in all areas," Mr Savisalo said. "The operations servicing mining and energy sectors are expected to continue to grow in line with the Prospectus Forecast. Large infrastructure projects are progressing smoothly according to their budgets and timetables." The Company reported a healthy level in forward order estimates and order book across its FACE and ART divisions.
It should be noted that the Appendix 4E lodged with the ASX relates to the full year results of Savcor Finn Pty Ltd and the three month results of the other entities, from 1 October 2007, when the operating entities were acquired by Savcor Group Limited, through to 31 December 2007. These figures are not comparable to the Prospectus forecasts. In this ASX Announcement and in its presentation all or part of actual results are compared with the Prospectus (either with Full Year Forecast 2007 or Director's Forecast Q4).
Cash position
Savcor's CEO Hannu Savisalo emphasises the fact that the result was pleasing. "The EBITDA margins of Savcor's FACE and ART divisions were very healthy, around 40% and 20% respectively for the full year. Cash flow has been better than expected. Comparable net debt at year end is $10 million below the Prospectus figures."
Growth opportunities
The Company continues to pursue the growth opportunities identified in its Prospectus:
- Assessment of bolt-on acquisition opportunities in key geographic markets such as Australia, China, India and Scandinavia as well as product areas such as remedial engineering, structural evaluation systems and RFID tags
- Organic growth opportunities include product enhancements in the decorative coatings areas of the FACE Division for mobile phones and further commercial development of the IPI system (Industrial Process Improvement, in this case, utilising electrochemical techniques to minimise scale build-up in alumina refineries). All R&D around IPI has been successful and a business unit will be formed to accelerate the commercialisation.
The integration of Pacific Lining Solutions, which was referred to in the Prospectus, has been successfully completed.
Outtlook
Mr Savisalo said that Savcor remains on track to deliver its CY2008 Prospectus earnings forecasts.
"We are pleased with activity levels and the outlook across both the FACE and ART divisions is healthy. We continue to reiterate the Prospectus forecast."
