Good morning, everyone, and welcome to Porvair's results presentation for the year ending 30th of November, 2025. I will start by giving a summary of the highlights for the year, and then hand over to James to talk through the financials. After that, I will give an update on our business model, strategic priorities, and the outlook for the year. So let's start with the highlights for the year. I will talk about the results in a minute, but allow me to first give you a flavor of what we have been up to in the year. It's been a busy year. Having been in the role for 10 months now, I've spent a lot of time with our teams, visiting all our locations and understanding the business. We have carried out a full review of the strategy and defined near-term priorities, which I'll speak to a bit later.
We have also enhanced the way we work as a team by establishing an executive committee responsible for the management of the group. We have been proactively managing the M&A pipeline and adding a resource in the center to support in M&A activities. Post-period end, by now you know that we have been deploying some of the cash generated during last year in the acquisition of Drache, which has taken the best part of last year to land, and we will speak about Drache a bit later as well. We also plan to host a capital markets event later in the year, where we will provide more details about the business, who we are, and what we do. At the bottom of this slide, you can see Porvair's track record for growth.
As shown, the 5-year, 10-year, and 15-year CAGRs are relatively consistent over a period where the size of the group has gone from around GBP 60 million turnover to close to GBP 200 million now. In terms of the year done, the group delivered record revenue, profit, and margin. We have seen the usual variable trading patterns across the segments in our end markets, and we will come back to that in the divisional slides. Our focus has been on the quality of earnings and margin progression, resulting in operating margin being 80 basis points up to 13.5, with margin progress across all our divisions. We delivered a strong cash performance and have been focusing on our capital allocation priorities to deploy the cash generated, all of this resulting in delivering a 10% EPS growth.
So overall, the group delivered another year of progress despite economic uncertainty and end market inconsistency. In terms of key themes for the year, we have seen variability across our end markets, which isn't unusual across our group, as we serve a range of markets in different parts of the world. While some markets can be down, we seem to experience others being up, and over time, resulting in a relatively consistent progress across the group. We saw increased demand from the aerospace market, which started slower in H1 and had a strong H2, which led to the year overall being up on previous year. The laboratory end markets showed steady progress, with clean water and the environmental demand being strong. The industrial demand was mixed, with nuclear sales growing in the year, while Petrochem, which can be lumpy, had a stronger first half than the second half.
Of course, as we all know, a year with macroeconomic uncertainty and tariff environment. Noting, however, that the group's manufacturing footprint mainly serves local customers. On margin, cash, and continued investment, we focus has been on margin improvement, and we have had some FX headwinds as expected. We generated GBP 23 million of net cash after investing GBP 7.7 million in CapEx, and we are making good progress in the investment for the Aluminum Cast House capabilities in Metal Melt Quality. I will now hand over to James to talk you through the financials and the divisional performance.
Thank you very much, Hooman, and good morning, everyone. Turning then to cover the financial summary of the year, top left-hand side, total group revenue of GBP 194 million is up 1% on prior year, and adjusted operating profit of GBP 26.2 million is up 7%, with the adjusted OP margin of 13.5% being an improvement of 80 basis points on the prior year, and as Hooman mentioned, with progress, margin progress across all three divisions. And I'll provide a bit more detail on the drivers of performance in the divisional review in just a moment.
Adjusted basic EPS, 42.3 pence, up 10% year-on-year, and cash generated from operations of GBP 29.2 million, up 14%, helping to deliver a closing cash balance just shy of GBP 23 million at the end of the year. Turning then to the adjusted income statement. Within the GBP 194 million of revenue, we had a translation Forex headwind from a weaker U.S. dollar, noting that around 45% of our group revenue is delivered from the U.S. On a constant currency basis, revenue growth was 2%. Price increases have been around 3% on average across the group, with volumes impacted by some strong comps in certain parts of the business, which I'll come onto shortly.
And as with revenue, EOP of GBP 26.2 million was also adversely impacted by Forex, this time by around GBP 0.3 million. The interest charge, you can see here, has decreased from GBP 1.8 million to GBP 1.1 million as we repaid our borrowings in the second half of last year, and the effective rate of tax has increased marginally to 22%, up from 21% last year. So the increase in operating profit performance, together with the lower interest charge and higher effective rate of tax, delivered the 10% growth in EPS to the 42.3p . Turning to the cash flow. So clearly, cash generation is central to the group's business model, and supports our investment in both organic and inorganic future growth.
So if I pull out the headlines then for, for the year, the 14% increase in cash generated from operations to GBP 29.2 million was driven by improved trading performance, particularly with the margin coming through, through the business, together with continued discipline in our working capital management, with the working capital outflow of GBP 1.6 million, an improvement against the GBP 3.8 million that we had at this time last year. So as a reminder, the GBP 29.2 million is stated after the recovery payments into the group's U.K. defined benefit pension scheme.
And as an update, during the year, we completed the latest triennial valuation of the scheme, after which we agreed with the trustees to maintain recovery payments of GBP 2.1 million per annum, with a view to reaching a low-risk self-sufficiency basis for the scheme by December 2028. It's been a busy year for CapEx, with GBP 7.7 million invested in a range of capital projects across all three divisions, which includes the usual GBP 1 million- GBP 1.5 million of maintenance-sustaining type CapEx. But the CapEx is higher than the usual run rate of GBP 5 million per annum, as it includes around GBP 3 million this year in relation to the group's GBP 5.5 million investment in the aluminum casthouse production line in Hendersonville, in the U.S.
which is a project we talked about before, and we have another GBP 1.5 million to go in 2026 on that project, as that comes to a close. So the CapEx number for next year is likely to be around GBP 7 million again. So moving towards the bottom of the slide, finished the year, as I said, with GBP 22.9 million of cash and no debt, having invested the GBP 7.7 million in CapEx. It's important to note at this point that we deployed a big chunk of that cash shortly after the year end, as mentioned, and we'll talk to it in just a moment. And as ever, the cash towards the bottom is stated excluding the IFRS 16 lease liabilities, which form part of our reported position.
A word on dividends. In maintaining the group's progressive dividend policy, the board is recommending a 7% increase in the final dividend to 4. 5p. Okay, turning over to the divisional review. This time round, we've included a slide on each division, as a reminder of what we do, as well as to provide some detailing to the drivers of performance across the group. Starting then with the Aerospace & Industrial division or A&I, as we refer to it, which delivered 43% of our group revenue this year from sites in the U.K., U.S., the Netherlands, Belgium, and India. Within the 43%, aerospace accounts for around 12%, so clearly the industrials are just over 30%. And as a reminder then of what we do, in aerospace, we mainly filter liquids on commercial aircraft.
So as an example, this is an image, pretty cool image, of an Airbus A321XLR, one of the newest, in the Airbus fleet, on which we supply over 200 parts on each aircraft, including filters and components for fuel systems, coolants, hydraulics, as well as, inerting filters. So the industrial part of our business is a little more difficult to summarize, as we provide a range of filters and solutions into various markets, including nuclear, Microelectronics, Petrochem, and Gasification, as well as for pharmaceuticals, and food and beverage. So in terms of the financial performance for this year, revenue is down 1%, flat at constant currency, with operating profit at GBP 11.9 million, and the margin at 14.2%.
A 20 basis points improvement on prior year, though still at the bottom end of the 14%-16% target range for the division. The end market dynamics have been mixed, particularly with industrials, which is not unusual for us. So if I start with aerospace then, revenue grew by 4% for the full- year, with a stronger second half than first. Whereas a reminder, revenue was down 8% on the prior periods, and while we continue to have good order visibility for aerospace, the timing of that revenue can always be affected by the broader supply chain, including fluctuations in OEM stocking levels. Petrochem sales finished 6% down after a strong first half, and as a reminder, Petrochem sales can be lumpy and so it proved this year with a much weaker second half than first.
As we enter 2026, we expect the European petrochem market to remain subdued for the remainder of the year. You may recall that we had a gasification win in the prior year with a particular client, with the majority of revenue trading in the 2024 numbers, but with some filters to ship in 2025, and so gasification revenue is, as expected, down year-on-year. In the second half, we won another modest gasification project with a new client, which is a testament to the quality of our offering, and this revenue is due to trade in 2026. A word on EFC then.
EFC is a business that we acquired back in December 2023, so that's now completed two full years with the group and has continued to demonstrate progress in the division and the benefits of becoming parts of Porvair. We continue to experience mixed end market performance within the U.S. Industrial, with some weakness, particularly within microelectronics. We had a pleasing end to the year within nuclear, where we finished 8% up and with a healthy nuclear order book going into 2026. Turning to the laboratory division or lab, which delivered 35% of the group revenue this year from sites in the U.K., U.S., Germany, Hungary, the Netherlands, and China. Life science accounts for approximately 20% of group sales, and environmental, our SEAL Analytical business, around 15%.
So in terms of what we do as a reminder, Life Sciences supports chromatography and other lab activities with Vyon filters used in various applications, for example, within pipette tips, together with microplates, vials, lab consumables, and lab automation equipment supplied by our Kbiosystems business. Within environmental, SEAL Analytical is a global leading supplier of automated lab instruments, which supports environmental, agricultural, and industrial testing, with a particular focus on water quality and the analysis of inorganic contamination and nutrients. So this background image you can see here is of the AQ700, a recent product launch by SEAL Analytical, which we've referenced in recent results announcements. Which runs large testing batches with next to no manual intervention in the lab, and in doing so, delivers accurate, low detection limit results.
So in terms of the financial performance then, revenue was up 4% to GBP 66.9 million, 5% up at constant currency, with operating profit at GBP 10.9 million, and the margin at 16.3%, nicely ahead of the target range of 15%+ for the division. Environmental delivered 9% revenue growth, with continued demand for SEAL instruments, and the life sciences businesses delivered steady progress with a particularly pleasing year for Kbiosystems, providing a range of new lab automation equipment into the market. So in terms of the drivers of performance this year, progress has been delivered by three main factors. One, an improved operational focus across the division. Two, a continued CapEx in automation and capacity, and three, a revenue drop through on increased volumes and throughputs, particularly within SEAL.
As ever, the division has been busy working on a range of new product introductions across both life sciences and SEAL Analytical, all of which bode well for the future. Finally, then turning across to Metal Melt Quality, or MMQ, as we refer to it as, which delivered 22% of our group revenue this year from 3 sites, 2 in the U.S. and 1 in China. With Aluminium Cast House accounting for approximately 10% of group sales and a range of filters and solutions for other applications, making up the remaining 12%. In terms of what we do, then as a reminder, MMQ manufactures filters, primarily ceramic filters, which you can see a glimpse of in the image, just above the numbers here. Ceramic filters and related equipment for use in various molten metal applications.
In Aluminium Casth ouse, our ceramic filters are a global leading product, supporting the growing demand for aluminium filtration. Which is a market we are excited about, given the global growth trends, which include the replacement of plastic by aluminium, the light weighting of transport, and the energy efficiency of cast house aluminium recycling, compared to primary production. And all of that, of course, is supported by aluminium's infinite recyclability. So clearly, this backdrop image is of aluminium can stock, and we estimate that over 90 billion cans have been through a Porvair filter. So, next time you guys are drinking from one of these, perhaps you can spare a thought for MMQ.
The remaining other section of the MMQ business includes foundry, through which filters are supplied into the auto, truck, and agriculture end markets, and also Super Alloy filters and systems, which support high strength applications, including those in aerospace and the energy markets. So in terms of the financial performance for this year, so revenue was 1% lower at GBP 43.4 million and up 1% on constant currency, with operating profit at GBP 6.6 million. And again, the margin, just over 15% and still above the target range for the division of 10%-12%. In terms of the product line performance then, so foundry was down and has weighed on the top line performance with softness in our U.S. markets, particularly within agricultural.
Although the second half did see an improvement in performance over the first half, and important to note again, that while foundry has weighed on the top line, it's a relatively small, lower margin offering within MMQ. The super alloys range, however, has delivered another encouraging performance, with revenue growth driven by demand in aerospace and energy, and, the aluminum demand has remained robust, including within our China business, and we see this aluminum demand continuing over the longer- term, backed by the global growth trends that I've already referred to. And so it's the performance of super alloys and aluminum, which continues to drive margin performance in the division. So worth noting that the aluminum cast house investments, that we've talked to before and that we kicked off last year, progressing to plan, with completion expected in the first half of 2026.
As a reminder, this is a once in a 20 year-25 year CapEx to replace and upgrade the aluminum production line, which will set the business up nicely for future growth within this market. So, that's all from me. My final points for metal melt, probably a nice segue to pass you back to Hooman.
Thank you, James. Let me say a few words about the acquisition of Drache, which we announced on the twelfth of January this year. Drache is a leading supplier to the aluminum filtration market. The growing global demand for aluminum is one of the many attractive end markets which the group operates in, and James just talked about some of the trends in this market. Drache is a business that we have known for many years and is a cultural fit with SELEE. It is a strong strategic fit with MMQ division in terms of geography, products, global commercial and technical team, and becoming a significant player in an attractive market. It gives the division a global reach with a new European base, and as you can see on the map, the two businesses complement each other from a geographical perspective in an excellent way.
With SELEE being strong in North America, while Drache is stronger in the EMEA region, and combined, the businesses strengthen the position in Asia. This will also bring complementary products to the ones SELEE has and strengthens MMQ's systems and engineering expertise, enabling the business to become a full product and service provider to its aluminum cast house customers. All of this should start to contribute to the group in 2026 and beyond, and as a result of the acquisition, MMQ's position within the group becomes more balanced. Let me quickly remind you about our business fundamentals. We make products that are regularly replaced, they are highly engineered, and they contain emissions, clean up processes, and reduce waste. And by doing that, our products typically protect our customers' critical downstream systems.
Demand is driven by the global growth trends shown on the top right, and Porvair remains well-positioned to benefit from end markets with long-term growth potential. These demand drivers, along with our business model, are what has delivered the 5-year, 10-year, and 15-year growth track record you have seen. Now, the advantage of making specialist filters are that you have this attractive business characteristics shown at the bottom of the slide. Niche positions, these are largely bespoke products or applications with recurring revenue and high customer retention. Fundamental demand drivers with the long-term growth trends mentioned, these products are regularly replaced, either by regulation or maintenance schedules, so there's a stickiness to the business. And generally, quite good barriers to entry. Some patents, but more so quality accreditation and the fact that a customer will need to requalify if they want to change supplier, is very important to us.
In terms of the group and the markets that we approach, you can, on this slide, see our three divisions and our main operating companies within each division. This slide is also trying to show what we mean with regulated markets. This is, for example, very clear in aerospace with the FAA and CAA accreditations. You can also see the growth drivers and growth rates for these markets and what our competitive advantages are. In our case, the installed base is important. Once you have been qualified to deliver a specific filter for a specific application, it's a sticky business, making us one of those businesses with high recurring sales. As we have engineered designs are typically engineered into our customer systems.
So, for example, if you get onto an aircraft model, you tend to be there for a very, very long time, provided that you deliver and perform. So this describes what we do and why we do it, and why we have enjoyed the growth rate that this group has delivered. Historically, half of the growth has been coming from the growth of the market, and half from new product development and inorganic growth. Most of you are by now familiar with our business model, which this slide is summarizing. Our strategic purpose being to develop these businesses for the benefit of all stakeholders. We principally measure success through consistent earnings growth, which is what we are trying to achieve, and certain ESG metrics. This consistency is something that is fundamental to how we drive the business, and I will speak to the ESG metrics on the next slide.
It is then all about focusing on the right markets, and I did highlight the ones that we are focusing on. Key to the group is a lot of customer-led product development going on across the whole business, and our capital allocation priorities. Firstly, to organic growth opportunities and then M&A, when we can find decent businesses for a reasonable price. Moving on to ESG. Generally, filtration companies have a good ESG story to tell, given that our products reduce emissions, cut waste, and improve efficiency of our customers' processes. We measure and incentivize senior managers with ESG metrics, some of which you can see on the top right box. You can see the progress on various of these on the slide, and it's a key focus for us, with a lot of activities going on around all of these.
Overall, we are making progress on many of these, but also have more work to do. We continue to invest in our people, talent development, and employee engagement. On carbon intensity, in 2020, we set a target of reducing our carbon intensity ratio by 10% by 2025. Having met this target in 2022, the group set an additional target of reducing the ratio a further 10% by 2025, which we achieved. So in total, reducing it by 31% from the baseline of 2020, and 11% from 2022. We do publish our ESG report as part of our annual report, in which we elaborate more around these, and within that report, we also outline our strategic framework. This explain why we like the markets in which we operate in, and how we see them developing.
Now, if we turn to the strategic update and near-term priorities. As mentioned already, we formed an Executive Committee during last year, consisting of the Executive Directors and the divisional MDs. We carried out a full review of the strategy together as a team. We like what we have got. There are many strengths of the group to build on, such as all division facing attractive end markets, which we have talked about earlier. We have outstanding people across the business. The decentralized model is key to how we operate and creates an entrepreneurial spirit across the business, with key commercial decisions being made close to the customers and suppliers.
Our technical expertise and know-how, and the fact that many of our products are engineered into our customer systems, and therefore leading to a high customer retention and high proportion of recurring revenue, of which most is derived from customers' OpEx spend. Our low customer concentration, diverse end market spread and geographical spread, and the differentiated product portfolio, all of which contributes to a source of resilience and consistency for the group. So to build on this great foundation, the strategy review covered how we can enhance execution, and forming an Executive Committee to deliver on the many opportunities we have is a part of this. Other areas are our approach to the market, given that we provide highly engineered products and solutions that protects our customers' complex and costly downstream systems. Agile, customer-led new product development continues to be a core business activity.
The group's operating model empowers our businesses to make decisions close to the markets they serve. At the same time, continuous improvement, operational excellence, and leveraging the experience across the group remains important. Our operating model drives profitable growth, while we continue to strengthen accountability across the business. I will, of course, be looking into us having the right focus and resources for execution, and underpinning all of what we do are our people across the business. To continue to invest in our people and talent development across the business remains an area of focus. Our capital allocation priorities continue to focus on investment in organic and margin-enhancing opportunities, and then inorganic growth by acquiring complementary businesses for a reasonable price. As you know by now, we have added a resource in the center to support in M&A activities.
All of these will underpin the group's long-term growth potential. Now, turning to the final slide and the outlook, you can see the key themes summarizing 2025 on the top. Looking forward, in the near- term, there is much to look forward to in 2026. Welcoming the team at Drache to the group, new product introductions in aerospace, SEAL Analytical, and Porvair Life Sciences. We also hope to see the recovery of industrial consumables, and longer- term, we see no change to the fundamental demand drivers for the group. These have served the group well in the past and will continue to do so. So we will continue to invest in the business, such as the installation of our new manufacturing line for aluminum filtration in Hendersonville, which should be up and running during this year, and we are committed to a strategy of organic and-