LONDON (ShareCast) - (Sharecast News) - Science Group said in a trading update on Wednesday that it was optimistic that its adjusted operating profit for 2023 would meet expectations.
The AIM-traded company attributed its outlook to its diverse sector portfolio and prudent cost management practices, setting the stage for another record-breaking year.

However, it acknowledged the challenges the current global economic and geopolitical climate poses.

The firm said its revenue for the year was affected, particularly in the consumer and industrial sectors, due to reduced client investments.

Despite the challenges, Science Group said it strategically entered the defence market by acquiring TP Group, and the integration of TPG Services and CMS2 - formerly TPG Maritime - was progressing smoothly.

Investments were made to strengthen operational management and business development functions.

Looking ahead to 2024, the board said it was cautious due to ongoing geopolitical instability.

High interest rates, a fragile consumer economic environment, and uncertainty surrounding political elections in the US and UK were exacerbating the impact on Science Group's clients.

While some optimism stemmed from reduced inflation in the company's key geographies, confidence in end-user markets was expected to remain subdued in the near-term.

However, Science Group said it was confident in its sector diversity, disciplined management culture and strong financial position, which were expected to provide resilience during these challenging times.

Recognising the importance of share trading liquidity, especially for small-cap investors, the board said it had continued its buyback programme when deemed beneficial for shareholders.

As of 17 November, it had repurchased 828,885 shares, equivalent to about 1.8% of its issued share capital, at a total cost of £3.3m.

"Science Group maintains a very strong balance sheet with gross cash at 31 October of £32.4m and net funds of £19.2m," the company's board said.

"This robust capital foundation, further enhanced by the undrawn bank facility of £25m, enables the board to continue to evaluate corporate opportunities in line with the group's strategy."

At 1440 GMT, shares in Science Group were down 2.96% at 393p.

Reporting by Josh White for Sharecast.com.

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