Science Group Achieves Record Adjusted Profit Amid Revenue Decline

Energy

18 days agoPWG Publications

Introduction

In a remarkable display of financial resilience, Science Group, a leading international science and technology consultancy and systems organization, has announced a record adjusted operating profit for the year ended December 31, 2024. This achievement is especially noteworthy given the modest decline in revenue during the same period. The company's ability to maintain strong margins and deliver significant shareholder value despite economic uncertainties underscores its robust business strategy.

Key Highlights

Adjusted Operating Profit: Science Group reported a record adjusted operating profit of £21.5 million, up from £20.5 million in 2023[1][2].
Earnings Per Share (EPS): Adjusted basic earnings per share rose to 36.2 pence from 33.3 pence, reflecting the company's focus on delivering shareholder value[1][2].
Revenue: The group's revenue slightly decreased to £110.7 million from £113.3 million due to market instability affecting certain divisions[1][2][3].
Cash Flow and Balance Sheet: Science Group generated £21.8 million from operations and ended the year with £38.6 million in cash and £26.8 million in net funds[1][2].

Financial Performance

Science Group's financial performance in 2024 was characterized by a notable increase in profitability. Despite a 2.4% decline in revenue, the company managed to boost its pretax profit by 93% to £14.7 million, thanks to effective cost management and margin discipline[1][3]. The significant reduction in administrative expenses, from £28.7 million to £21.4 million, also contributed to this improved financial position[3].

Strategic Divisions

Consultancy Services Division: This division faced challenges due to market instability, with revenue dropping to £72.2 million from £81.3 million in the previous year[2].
Systems Division (CMS2 and Frontier): The CMS2 business saw a substantial turnaround, with revenue increasing to £25.9 million from £21.3 million. Frontier Systems also reported a rise in revenue to £12.0 million from £10.0 million[2].
Property Services: The company generated £0.6 million from property and associated services, a slight decrease from the previous year's £0.8 million[2].

Corporate Developments

Post-year-end, Science Group made several strategic moves to enhance its position and expand its influence in the market:

Investment in Ricardo: In February and March 2025, Science Group acquired a significant stake in Ricardo, a leading UK-based science and technology consultancy and engineering firm. As of March 19, 2025, Science Group held 16.2% of Ricardo's shares[2][3].
Renewal of Banking Facilities: The company renewed its banking facilities, including a term loan and revolving credit facility, providing enhanced financial flexibility[2].
Expanded Share Buy-Back Programme: The share buy-back programme for 2025 has been increased to over £6 million, indicating the company's commitment to returning value to shareholders[1][2].

Strategic Outlook

Despite economic volatility and market challenges, Science Group's strong balance sheet and effective operational execution have demonstrated resilience. The company remains focused on translating its operational performance into tangible shareholder value, as highlighted by Executive Chair Martyn Ratcliffe. The strategic investment in Ricardo and the decision to maintain the dividend at 8 pence per share align with this strategy, reflecting a commitment to sustainable corporate growth and wealth creation for investors[1][2].

Market Impact

Science Group's performance has outperformed relevant market indices, with its stock showing stability amidst economic uncertainties. The company's ability to generate significant cash and maintain a robust balance sheet positions it well for potential future acquisitions and strategic investments, further solidifying its presence in the consultancy and systems sectors[1][2].

Conclusion

In summary, Science Group's record adjusted profit in 2024, despite a slight revenue decline, demonstrates its ability to navigate complex market conditions effectively. The company's strategic moves, including the investment in Ricardo and the expansion of its share buy-back program, underscore its commitment to delivering value for shareholders while maintaining operational resilience.

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