The small company specialists COMPANY INFORMATION

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The small company specialists COMPANY INFORMATION Avingtrans plc (LSE:AVG) Info sheet compiled March 2006 Company Eye Ranking 26/50 EDITOR'S NOTE Avingtrans plc runs a number of subsidiaries that design and distribute precision engineering components to a wide variety of industries. The company is increasing its total turnover although the cost of sales is also increasing leading to only marginal increases in profit after the same period last year. It is our opinion that the group is being directed sensibly and that the continued expansion of the business shows that the management is positive about the future.

However we believe that the company will not head forward quickly enough to justify the high PE ratio and would wait for news before an investment is made. 1 YEAR CHARTFUNDAMENTALS Company Name Avingtrans plc Current Price 216 Status AIM Market Cap 33.54 m. Price-To-Book Ratio1.55 Shares in Issue 15.53m Activities Provision of precision engineering components Sector Industrial Goods & Services Corporate advisor KBC Peel Hunt Registrar Capita Registrars HISTORY Avingtrans plc disposed of its former operating businesses to Goldstart Limited on 1st December 2000 thereby reverting to a non-trading business.

This business retained a sum in excess of £4 million on deposit and set about ... more. less.

seeking a suitable acquisition opportunity that afforded shareholders a combination of good long-term growth and an acceptable level of risk. Subsequently, the Jenaer Group of Jenaer Gewindetechnik GmbH, Jena-Tec Inc., Jena Rotary Technology Ltd. and C&H Precision Finishers Ltd. were acquired by Avingtrans plc from Ferraris Group plc on 28th June 2002. ACTIVITIES The Group's principal activity is providing precision engineering components and services to the medical, scientific and research communities, traffic management, automation, machinery and aerospace industries. The Group designs, manufactures, repairs and services housings for roadside safety cameras and gantry and trackside signalling poles. The Group also specialises in rotating bearing technology focusing on the manufacturing, distributing and servicing of ballscrews and spindles. The Group also polishes and finishes turbine and compressor blades and vanes for aeroengine and power generation industries. The Group also manufactures machined and fabricated components and for diagnostic imagery. The Group operates in the United Kingdom, Germany and the United States of America. During 2005, the Group acquired the entire share capital Stainless Metalcraft (Chatteris) Ltd. The small company specialists COMPANY INFORMATION THE BUSINESS CH Precision Finishers Ltd - UK Final polishing and specialist finishing on aeroengine turbine blades, compressor blades and vanes for the power generation industries. Operate from wholly owned freehold premises, also home for Avingtrans plc., group management Sigma Precision Components Ltd Sigma Precision Components manufactures precision prismatic components for the aerospace industry from their new purpose-built 30,000 ft2 facility in Chengdu, China. Having offices in both the UK and China, the company offers a range of services to clients wishing to enter or benefit from emerging markets. B&D Patterns Ltd B&D Patterns was founded over 45 years ago and has grown to become a market leader in rigid and flexible pipe assemblies and components for prestigious customers such as Rolls Royce, Messier Dowty and Dunlop Aerospace for use in their jet engines. Stainless Metalcraft (Chatteris) Ltd - UK The manufacture of machined and fabricated components for major OEM 9s of diagnostic imagery together with the worldwide technological, science and research communities. Crown UK Ltd - UK Design and manufacture leading pole and support fabrication units, known as 8Crown Pole 9 for roadside safety cameras. Manufacture new developments in rail track signalling, gantries and trackside signalling poles. Jenaer Gewindetechnik GmbH - Germany Design and manufacture precision ballscrews and related products from major new plant in Jena, Germany. Ballscrews are critical in the running and precise movement of (CNC) computer controlled machine tools and precision instrumentation. Jena Rotary Technology Ltd - UK Market Jena-Tec range of precision ballscrews. Operate fast service repair for UK ballscrew users. Design and manufacture (B&T) Boneham & Turner range of spindles. UK sales and service for GMN (Spindles). Jena-Tec Inc - USA Sales and support operation for the Jena-Tec product range throughout North America. DEVELOPMENT HIGHLIGHTS 22 nd Sept 2006 3 Acquisition of B&D Patterns Limited. Acquisition of B&D Patterns Limited for consideration of up to £10.5 million, of which £6.583 million is payable in cash and £417,000 will be satisfied by the issue of Avingtrans ordinary shares of 5 pence each on completion and the remainder subject to an earn- out calculated by reference to B&D's profit before tax for the years ended 31 May 2007 and 31 May 2008. 20 th June 2006 3 Acquisition of majority stake in Sigma Precision Components Ltd. Sigma provides a range of services to aerospace and high technology markets and, with the injection of new funds into the business, is poised to accelerate the scale of its operations in China. 1 st January 2006 3 CH Precision Finishers sign 3 year agreement with Rolls Royce plc. Avingtrans plc Subsidiary, CH Precision Finishers Ltd. are pleased to announce the signing of a 3 year Agreement for the Supply of Goods and Work to Rolls Royce plc. The Agreement, effective from 1st January 2006, includes the precision polishing of turbine and compressor blades and vanes for a variety of Rolls Royce aero engines. 15 th September 2004 3 Acquisition of Stainless Metalcraft (Chatteris) Ltd. Metalcraft acquired for £8.1 million which includes the assumption of approximately £500,0000 of debt, and of which £0.1 million is payable on the first anniversary of completion ROLLING EPSPE RATIO The small company specialists COMPANY INFORMATION GROUP STRUCTURE DIRECTORS Kenneth M Baker OBE - Chairman Ken was appointed Chairman of the Company following the acquisition of the Jena Group in 2002. He also Chairs the Nominations Committee. Ken is a Director of two other quoted companies, Falcon Investment Trust and The East German Investment Trust. He is a Director of The German British Chamber of Industry and Commerce and a Director of several private family companies. Ken was formerly Chairman of Ferraris Group plc and has been involved in the management and direction of various precision engineering and technology companies for most of his business life. Steven J Lawrence - Managing Director Steve was appointed Executive Director of the Company following the acquisition of the Jena Group in 2002. He is also a Director of each of the Subsidiary companies. Steve was formerly a Director of Jenaer Gewindetechnik GmbH, Jena Rotary Technology Ltd. and C&H Precision Finishers Ltd under their previous ownership by Ferraris Group plc. Steve has been in operational management roles in the precision instrumentation industry since 1976 having formerly been with PGM Ballscrews Ltd., a business in the precision engineering components sector. Stephen M King - Financial Director Stephen was appointed Finance Director and Company Secretary in September 2002. He is also a Director and Company Secretary for each of the UK Subsidiary companies. Stephen joined from Pricewaterhouse Coopers where he was a Senior Manager in the Assurance and Specialist Transaction practice. Jeremy J Hamer - Non-Executive Director Jeremy stepped down to Non-Executive Director in 2002 following the acquisition of the Jena Group, having previously been Chairman since 1998. He is Chairman of the Audit Committee. Jeremy has a wealth of AIM listed company experience currently being Non-Executive Chairman of Inter Link Foods plc and Non-Executive deputy Chairman of Honeysuckle Group plc. Stephen M Bruh - Non-Executive Director Stephen stepped down to Non-Executive Director in 2002 following the acquisition of the Jena Group, having previously been an Executive Director. He is Chairman of the Remuneration Committee. The small company specialists COMPANY INFORMATION SHAREHOLDINGS Number% Unicorn Asset Management Limited2,442,81814.0 Nigel Wray2,327,43313.3 Bluehone Investors LLP2,101,00012.0 JP Morgan Asset Management (UK) Ltd 1,426,8008.2 Number% Singer & Friedlander Investment Management Limited889,5005.1 K M Baker812,0004.6 Octupus Asset Management723,0784.1 FINANCIAL HISTORY Profit and loss account year ending 30 th November 2006 £000 6 months to 30 th November 2006 Year to 31st May 2006 Continuing operations14,61732,490 Current period acquisitions2,542- Group turnover17,15932,490 Operating profit - continuing operations 1,5783,163 Operating profit - Current period acquisitions 251- Amortisation of goodwill(324)(393) Group operating profit1,5052,770 Profit on ordinary activities before interest 1,5052,770 Net interest payable and similar charges (222)(345) Profit on ordinary activities before taxation 1,2832,425 Tax on profit on ordinary activities (382)(489) Profit on ordinary activities after taxation 9011,936 Equity minority interests6- Profit for the financial period9071,936 Earnings per share - Basic5.6p13.3p Earnings per share - Diluted5.5p12.4p Balance Sheet a t 30 th November 2006 £000 At 30 th November 2006 At 31 st May 2006 Intangible assets15,0006,777 Tangible assets10,5686,203 Investments1515 Fixed assets25,58312,995 Stocks4,9723,190 Debtors due within one year8,3104,931 Cash at bank and in hand5801,398 Current assets13,8629,519 Creditors: Amounts falling due within one year (11,728)(6,284) Net current assets2,1343,235 Total assets less current liabilities27,71716,230 Creditors: Amounts falling due after more than one year (11,575)(3,334) Provisions for liabilities and charges (281)(250) Net assets15,86112,646 Capital and reserves-- Called up share capital866771 Share premium account6,5424,310 Capital redemption reserve813813 Other reserves180180 Profit and loss account7,3946,572 Equity shareholders' funds15,79512,646 Equity minority interests66- Total Funds15,86112,646 RISK FACTORS In addition to the other relevant information, the following specific factors should be considered carefully when evaluating whether to make an investment in the Company. The investment offered in this document may not be suitable for all of its recipients. Before making an investment decision, prospective Investors should consult a person authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities. A prospective Investor should consider carefully whether an investment in the Company is suitable for him/her in the light of his/her personal circumstances and the financial resources available to him/her. There are various risk and other factors associated with an investment of the type described in this document. In particular: The small company specialists COMPANY INFORMATION The value of an investment in the Company is largely dependent upon the expertise of the Directors and their ability to identify and acquire or invest in suitable companies or businesses. There can be no certainty that the Company will be able to identify suitable acquisition targets or complete the purchase of any identified targets at a price the Directors consider acceptable. In the event of an aborted acquisition it is likely that resources may have been expended on investigative work and due diligence, which cannot be recovered. The acquisition of other businesses can involve significant commercial and financial risks and there can be no certainty that any acquired business will not have a material adverse effect on the operations, results or financial position of the Company. CONTACT Precision House Derby Road Sandiacre Nottingham NG10 5HU RANKING Ranking out of 50 (50 being highest) Business model - competitive advantage Competition 30 Customers 30 Low cost 20 Management 30 - corporate governance - quality - shareholding Product 33 Sector 20 Financial evaluation Early and profitable exit potential 25 Financial strength 30 - cash flow - conservative accounting - need for funding Growth at a reasonable price Risk Overall average rating 26 The small company specialists COMPANY INFORMATION FURTHER INFORMATION ABOUT THE RANKING Competitive advantage Companies are assessed according to their business model and how this translates into strong and sustainable competitive advantage. This can only be achieved with low cost activities and doing something different from the competition. This 8differentiation 9 must add value to the customer who is then prepared to pay a premium price. The differentiation is most obvious in the product but it can exist anywhere in the company 9s value chain of activities, such as easy payment terms, convenient locations, superior management, and quality of suppliers. Companies that do not achieve competitive advantage because they have the same costs and/or do the same as the competition are marooned in a profitless zone. They helplessly try to compete with the one weapon left open to them, which is the disaster of cutting prices and typically leads to similar retaliation by competitors, with disastrous results. THE FOLLOWING ELABORATES ON THE RANKING CRITERIA Competition How intense is the competition and are there barriers to entry? Customers Is the company controlling its customers and therefore its revenue streams? Are customers glued to the company and providing valuable and reliable recurring revenue or are they one-off, or 8transactional 9, providing shaky revenue? The company should ideally have weak and numerous customers. Low costs Has the company achieved low cost activities thus allowing more of the top line revenue to trickle down to the profit line? Management Is there good corporate governance? What is the quality of management, as this is crucial to any business? Are the directors 9 shareholdings significant but not so large that they control the company? Product Is the product different from the competition and adds value to the customer? Are there threatening substitutes? Does it have a powerful brand? Sector Is the company in an attractive sector that is profitable and adds value? Services tend to be more protected than products from international competition. Does the sector ride the tailwind of multi-year mega trends? Is the business well positioned in the current stage of the economic cycle? What is its resistance to a recession? Profitable exit potential What is the potential for selling the share profitably? This is more applicable to pre-flotation investments. Financial strength Does the company have strong cash flow, the lifeblood of any business? Is the accounting conservative or is there 8accounting for growth 9? Does it need more funding? Is the profit margin healthy and at least equal to its sector? What has been the track record in the growth rate of profits? Growth at a reasonable price Does the share offer growth at a reasonable price? This is commonly measured using the PEG. This is the price earnings ratio (PE) divided by the forecast growth rate in earnings per share (EPS). The lower the PEG the better and under 1.0 is considered good for a blue chip company and under 0.6 for a small growth company. Risk What is the risk rating of the share due to factors such as new markets, its business model and strategies? This document must not be reproduced without the prior written consent of Company Eye. Risk Warning: Should you have any doubts about the suitability of this investment please consult with a professional adviser in accordance with the Financial Services and Markets Act 2000 ( cFSMA 2000 d). This document is provided as information only and is not intended to act as a financial promotion without the approval in accordance with section 21 of the FSMA by an authorised and regulated company. Company Eye does not acc ept responsibility for the accuracy of the information contained in this document and investors should not rely on this document when contemplating an investment. The value of investments can go down as well as up and you may not get back the full amount originally invested. This document should not be reproduced without the prior consent of Company Eye.

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