Sparks

Science Group reported a resilient H1, with adjusted operating profit (AOP) rising to £11.5m (H125: £11.3m) and the AOP margin advancing to 24.3% (H125: 19.7%). Core revenue eased to £46.4m (H125: £48.7m) and total revenue to £47.2m (H125: £57.2m), the difference reflecting the deliberate, margin-accretive reduction of low-margin, pass-through defence revenue. Adjusted basic EPS increased to 20.4p (H125: 19.3p), helped by the buyback-driven fall in share count. Reported PBT of £8.1m was broadly consistent with the prior year once normalised for H125’s £24.0m exceptional corporate investment gain. Cash conversion remained strong at 94%.

The Services division, Sagentia, held its AOP margin at 24.0% (H125: 23.9%) despite Middle East-driven softness in international client confidence, on AOP of £7.0m (H125: £7.9m) and core revenue of £28.2m (H125: £29.0m). The group’s two Systems businesses, Critical Maritime Systems & Support (CMS2) and Frontier, both performed in line with expectations. CMS2 lifted AOP to £4.3m (H125: £3.6m) on a margin the company describes as an exceptional 38.3% (H125: 21.9%) owing to contract timing, with a more normalised full-year margin anticipated. Frontier held AOP flat at £0.9m on revenue of £6.8m (H125: £7.1m).

The balance sheet remains a key feature: group cash of £67.9m (H125: £82.0m), net funds of £56.8m (H125: £70.3m) and an undrawn £30.0m revolving credit facility. The buyback returned £13.5m in H1 (2.4m shares at an average 553p), with 2026 allocation anticipated to exceed £20.0m. The board expects sequential H2 growth, led by Services and supported by July’s release of the UK Defence Investment Plan, from which Sagentia Defence is already seeing improvement.