The nuclear renaissance is no longer simply about decarbonisation and base load capacity. AI and hyperscale data centres require vast quantities of reliable, round-the-clock power - while the Iran conflict and renewed energy instability has pushed domestic electricity generation back up government agendas. Indeed the International Atomic Energy Agency expects worldwide nuclear production to climb from 377GW to between 561GW-992GW by 2050.
Step forward specialist engineer Avingtrans (£220m Mrkcap) , one of the few quoted UK 'picks and shovels' plays positioned to benefit from this multi-decade build-out.
Today the company raised £21m at 630p/share (representing 9.8% of group) - notably at no discount to last night’s closing price - to turbocharge the US nuclear operations of its Hayward Tyler business. Net proceeds of £19.9m will principally fund a new Michigan manufacturing facility, specialist equipment, workforce recruitment/training, working capital and contingency.
The high return project is low risk too. Since Avingtrans already has qualified nuclear capabilities (21% of sales), longstanding customer relationships and visible opportunities with established and next-generation reactor developers. Its estimated ten-year US nuclear addressable market is $2.5bn, of which management believes around $1.3bn is realistically obtainable, excluding potential aftermarket income.
Better still, the Board believes the £21m can increase nuclear revenues from £35m today to £90m by 2031. With Hayward Tyler (re nuclear = 32% of sales) specifically contributing an extra £27m–£45m of turnover and £9.6m–£17m of EBITDA in FY31 - representing an ultimate EBITDA RoI of between 45%-80% pa.
Meaning this 'no-brainer' capex - assuming a 12x EBITDA exit multiple - could theoretically generate £115m-£204m of incremental value for the group over the next 5 years.
Institutional support was encouraging as well. Here a blue-chip investor committed up to £11m, while Chairman Roger McDowell invested £0.8m. CEO Steve McQuillan recently highlighting the group’s continuing “positive momentum” and growing visibility from nuclear and AI-related markets.
Cavendish forecasts FY26 revenue of £163.2m, adjusted EBITDA of £20.8m, PBT of £12.3m and EPS of 31.7p, rising in FY27 to £188.3m, £24.6m, £15.3m and 35.4p respectively. At 630p, that equates to 17.8x FY27 earnings and 9.2x EV/EBITDA, with Cavendish lifting its target price from 681p to 770p/share, with Singer Capital Markets at the same level.
Disclosure: Avingtrans is a Vox Markets client.