Capital investment supporting growth and geographic expansion
Since 2010 Porvair has delivered 9% CAGR revenue growth. During that period:
- New products have driven sales and margin growth;
- The Group has won over US$70 million of large contracts; and
- Debt has been eliminated. In 2015, the Group completed new facilities in New Milton, UK, Caribou, ME, US and Xiaogan, China. It is currently fitting out a new plant in Ashland, VA, US.
Our investment priorities for 2016 are:
- Further investments in production capacity in the UK.
- To fit out the new plant in Ashland, VA and bring it into operation.
- To complete the investment in Xiaogan, China and increase production from the plant.
- To invest in gasification maintenance and services for Reliance in India.
- Investments focused on productivity and the integration of Fiber Ceramics in Metals Filtration in Hendersonville, NC.
New product development drives organic growth
New product development is a core activity for the Group. We undertake it to generate growth rates in excess of the underlying market. We try to build good intellectual property positions around our product developments through patents and know-how. In Metals Filtration we have three main patented product ranges:
- Selee CSX™ for aluminium filtration, where we have a high global market share;
- Selee IC™ for gray and ductile iron filtration; and
- Selee SA™ for the filtration of nickel-cobalt alloys.
In Microfiltration there are development projects in bioscience filtration, water analysis, nuclear filtration, aviation filtration and new filter media development.
Our priorities for 2016 include:
- Adoption of our proprietary aluminium lithium filter.
- Launch of a patented aluminium filter formulation in our Chinese operation.
- Evaluate a new formulation for the filtration of steel.
- Finish the development of our DNA filtration product range and seek commercial partners.
- Bring two new platforms to market for the water analysis market.
- Launch a host of new products in the microelectronics filtration market as we combine the expertise we have in Caribou, ME, US with the newly acquired TEM in Idaho.
Adding value through targeted acquisitions
We buy businesses that add complementary technologies and products, expand our geographic footprint, or allow us to leverage our existing scale and infrastructure.
In 2015 we acquired:
- Fiber Ceramics, which has been moved to the Metals Filtration plant in Hendersonville, NC, brings technical capability, a shorter production cycle and stronger formulation for steel filtration.
- TEM, a filter business serving the microelectronics industry with a well designed product range and an experienced distribution network.
Organic growth generates the financial and business resources we need to fund acquisitions.
Generating shareholder returns through dividend payments and capital appreciation
Our focus on cash generation enables us to reinvest in the business to drive growth and to generate attractive shareholder returns through a progressive dividend policy.
Success of the strategy is measured by growth and cash generated from operations over the short and long term.
The Group has a well established governance structure with internal control and risk management systems. The risk management process provides a framework to identify, assess and manage risks to the Group’s overall strategy and the contribution of its divisions.
The Porvair Board sets high standards for its corporate governance and expects steady and continuous improvement in the Group’s governance procedures.