AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2025

Science Group plc, (‘Company’, ‘Science Group’ or the ‘Group’), the international services and systems company delivering innovation through the application of science, technology and engineering, reports its audited results for the year ended 31 December 2025.

• Strong operating performance despite volatile market conditions
  • Record adjusted* operating profit of £23.1 million (2024: £21.5 million)
  • Record adjusted* basic earnings per share of 40.2 pence (2024: 36.2 pence)
  • Revenue of £111.7 million (2024: £110.7 million)
  • Operating Return on Capital Employed of 54.7% (2024: 37.6%)

• Operating results augmented by corporate activity
  • Pre-tax gain of £24.1 million from corporate investment
  • Record profit before tax of £41.5 million (2024: £14.7 million)
  • Record statutory basic EPS of 75.1 pence (2024: 26.5 pence)

• Robust balance sheet and cash flow
  • Cash of £72.6 million (2024: £38.6 million)
  • Net funds of £61.2 million (2024: £26.8 million)
  • Cash generated from operations of £31.8 million (2024: £21.8 million)

• Shareholder returns
  • Recommended dividend increase of 25% to 10.0 pence per share (2024: 8.0 pence)
  • Share buy-back increased to £10.7 million (2024: £5.0 million)
  • Buy-back anticipated to continue at a broadly similar level in 2026

* Alternative performance measures are provided in order to reflect the underlying financial performance of the Group. Details and definitions are provided in the report.

Statement of Executive Chair

Science Group is an international services and systems company delivering innovation through the application of science, technology & engineering. In 2025, the Group again demonstrated the resilience of its business model reporting record operating profit and earnings per share despite volatile market conditions.

Science Group’s strong balance sheet provides a solid foundation for the business operations and enables capital allocation options including cash returns to shareholders and investment in corporate opportunities where the Group’s management and technical resources can be deployed to enhance shareholder returns. In 2025, both capital allocation strategies were successfully deployed, delivering increased capital returns and material incremental value to Science Group shareholders.

Group Financial Summary

For the year ended 31 December 2025, Science Group reported adjusted operating profit (‘AOP’) of £23.1 million (2024: £21.5 million) with adjusted (operational) basic earnings per share of 40.2 pence (2024: 36.2 pence). Revenue was broadly consistent at £111.7 million (2024: £110.7 million) with an increased operating margin of 20.7% (2024: 19.5%).

The Group’s statutory operating profit was £40.9 million for the year (2024: £14.9 million) including the benefit of £24.1 million resulting from the corporate activity. Profit before tax was £41.5 million (2024: £14.7 million) and statutory basic earnings per share was 75.1 pence (2024: 26.5 pence).

Cash generated from operations was £31.8 million in the year (2024: £21.8 million), benefitting from the normalisation of a higher receivables balance at the end of 2024. The strong operating cash flow was further enhanced by the net gain from the corporate investment. As a result, at 31 December 2025, Group cash was £72.6 million (2024: £38.6 million) and net funds were £61.2 million (2024: £26.8 million), after returning £14.3 million to shareholders in the year, more than doubling the buy-back programme to £10.7 million (2024: £5.0 million) whilst maintaining the dividend payment. The estimated tax liability (£5.1 million) associated with the investment was also paid prior to the year end.

The Board’s priority remains operating margin, profit and cash flow. Shareholder alignment is evidenced by the 9-fold increase in AOP over the past 15 years delivered from share capital dilution of less than 4% since December 2010. Combining the margin and profitability focus with disciplined working capital and balance sheet management, since 2020 Science Group has reported a Return on Capital Employed (‘ROCE’, defined as AOP/Net Equity less Net Funds) in excess of 30%, with 2025 reaching 54.7% (2024: 37.6%).

In view of the consistent operating performance, strong operating cash flow and significant cash resources, the Board is recommending the annual dividend be increased by 25% to 10.0 pence per share (2024: 8.0 pence). Subject to shareholder approval at the Annual General Meeting, scheduled for 20 May 2026, the dividend will be payable on 2 July 2026 to shareholders on the register at the close of business on 22 May 2026.

Operating Business Review

Science Group provides services and systems, characterised by deep technical expertise applied with detailed domain knowledge, across Medical, Defence, Industrial and Consumer market sectors. Shared services functions provide Finance, Legal, HR, Property Management and IT support across the Group, improving efficiency and operational governance. The costs of these central functions (along with allocated property costs) are charged into the operating businesses and the segmental reporting therefore reflects the financial performance of each business as a stand-alone entity. The only costs not charged to the operating businesses are the Corporate costs which account for less than 3% of Group revenue.

Sagentia Services Division

The Services Division, operating under the Sagentia brand, is an international business providing advisory, product development and regulatory services. The Division’s high calibre science, engineering and technical resources are deployed across Medical, Defence, Consumer (including Food & Beverage) and Industrial/Chemical markets.

Sagentia is a trusted services partner to its clients, often providing leading edge innovation or technical insight in support of a customer’s strategy. While the majority of the Division’s projects are therefore confidential, the Division’s reputation for providing high quality services is reflected in the levels of repeat business and long-term relationships. Recent projects have covered a diverse range of activities:

• from market-leading medical robotics to the application of generative AI in consumer-facing R&D;
• from developing new concepts in defence to environmentally-friendly pest control; and
• from formulating MAHA-compliant edible dyes to incorporating physical AI into domestic robotics.

Sagentia is positioned as a premium rate, high value-add services organisation. A significant proportion of consultants have Masters Degrees or PhD qualifications in science or engineering subjects and the Group benefits from impressive freehold properties providing office and laboratory facilities consistent with the high-end market positioning. It is the deployment of multi-disciplinary teams, combined with the Division’s commercial and operational management, that translates into shareholder value.

The Defence practice, acquired as part of TP Group in 2023, was historically dependent on low margin, pass-through contractor revenue, which also carried material counterparty risk. This emphasis on revenue rather than margin was inconsistent with the Sagentia strategy of focusing on high value-add services. Therefore, a progressive exit of this low-end activity has been undertaken whilst developing the higher quality practice areas, enabling the Division’s deep science and technology innovation services to access the UK defence market.

For the year ended 31 December 2025, the Services Division generated revenue of £71.5 million (2024: £72.2 million), the slight decline reflecting the Defence transition referenced above, partially offset by a strong performance in the Medical practice. The Industrial and Consumer sectors delivered a creditable performance in challenging market conditions during 2025. By geography, the UK accounts for 36% of the Division’s revenue with North America accounting for 41% and Continental Europe for 13%. (The business has minimal direct exposure to the Middle East.) The execution of the Services strategy translated into an increased adjusted operating profit of £18.8 million (2024: £17.9 million) and a margin improvement to 26.3% (2024: 24.9%). Subject to external factors (e.g. geopolitical events), the Board does not anticipate the market to change materially in 2026 and the priorities will continue to be margin, profitability and cash conversion.

With regard to the potential influence of AI on the business, Sagentia continually evaluates new technologies. Accordingly AI tools are being utilised in several areas to augment the Division’s service propositions, within a defined governance regime. Due to the strategic emphasis on higher end scientific, technical and engineering services, AI applications to date have been incremental although this is anticipated to progressively increase in the years ahead, enhancing Sagentia advisory services while potentially expanding the opportunities in Physical-AI where the Division’s sensor and robotics expertise is highly relevant.

Systems Businesses

The Group has two systems businesses, CMS2 and Frontier, both of which have leading positions in their specialist markets. These businesses operate independently but are supported by the Group’s corporate functions/infrastructure and, if required, can access the Sagentia Division’s science, technology and engineering capabilities on an arm’s length basis. In aggregate, for the year ended 31 December 2025, the Systems businesses reported increased revenue of £39.6 million (2024: £37.8 million) and an adjusted operating profit of £6.6 million (2024: £5.8 million).

CMS2 (Critical Maritime Systems & Support) designs, manufactures and supports atmosphere management systems for submarines, providing both oxygen generation and CO2 extraction capabilities. The business has a market leading position outside the USA and services an international client base, although the UK (direct to MoD and via prime contractors) continues to account for the majority of the revenue.

For the year ended 31 December 2025, revenue was £26.4 million (2024: £25.9 million), including £5.2 million of low-margin pass-through materials related to support contracts (2024: £5.6 million). Adjusted operating profit was broadly consistent at £5.5 million (2024: £5.7 million), within the anticipated variability for the characteristics of the business.

The solid financial performance, delivering operating margin of 21.0% (2024: 22.2%) in a defence business, demonstrates the success of the financial and operational turnaround since the acquisition in 2023. This progress continued throughout 2025 with the ongoing roll-out of support contracts across the majority of the installed base enabling improvements in customer service.

The volatile geopolitical environment in recent years, combined with developments in the operational theatre, continue to reinforce the imperative of submarines and particularly the need for extended underwater deployments. CMS2 is well positioned as a supplier to the UK fleet and to international allies.

Frontier is a market leading supplier of DAB/DAB+ radio and connected audio chips and modules. Rarely visible to the end user, Frontier technology powers the majority of the DAB products (non-automotive) sold across the European market, with a reputation for quality and reliability. In recent years, Frontier has developed a new connected audio product, Auria, and following multiple design wins from a range of brands, the first products are expected to enter the retail channel in 2026.

While the consumer electronics market is unlikely to return to the levels experienced during the pandemic, volumes appear to have stabilised and Frontier’s customers (collectively, brands in Europe and factories in China) have returned to more predictable ordering patterns. As a result, revenue increased to £13.2 million (2024: £12.0 million) producing an adjusted operating profit of £1.1 million (2024: £0.1 million). This result was achieved after expensing all costs associated with the investment in Auria, since Frontier does not capitalise R&D expenditure.

While the underlying outlook for the established product range is anticipated to be relatively stable in the year ahead, there are external factors potentially affecting the business, including industry-wide memory cost increases, US Dollar exchange rate volatility and uncertainty related to potential transport disruption resulting from the situation in the Middle East. More strategically, the medium-term opportunity represented by Auria is significantly larger than the core radio market, offering potential for material growth.

Corporate

The Corporate function is responsible for the strategy, corporate development and governance of the Group, ensuring alignment of business operations with shareholder priorities. The capital generated from the high margin, high cash flow operations is invested in corporate opportunities where the Group’s management and technical resources can be deployed to enhance shareholder returns. The underlying costs of the corporate function were £3.1 million (2024: £2.9 million), which are the only costs not charged to the operating businesses.

The major activity of the Corporate function in 2025 was the successful investment in Ricardo plc (‘Ricardo’). This followed detailed analysis undertaken in 2024 which concluded that Ricardo market forecasts appeared challenging, analysis that was subsequently confirmed by the Ricardo profit warning in January 2025. Science Group commenced building a stake, ultimately becoming the second largest shareholder in Ricardo. While the potential opportunities for collaboration were readily apparent, the Ricardo Board elected not to engage with Science Group, resulting in a progressive escalation. However, in June 2025, a third party made an attractive offer for Ricardo at a significant premium to the Science Group investment cost and the Board accepted the offer, realising a net gain of £24.1 million before tax, a return-on-investment in excess of 70% in less than 5 months.

In parallel with the corporate activity, the Group also renewed its financing facilities with an extended forward commitment to provide the Board with optionality in capital allocation. In summary:

• Two new Term Loans totalling £12.0 million for a 10-year period at the same margin as the previous (2016) Loan, with interest rate swaps to fully hedge the loan interest. These 10-year loans are secured solely on the Group's freehold properties and are not subject to covenants related to operating business performance.
• A new Revolving Credit Facility (‘RCF’) of £30.0 million on a 5-year term (with an additional £10.0 million accordion option, subject to approval) at 1.95% above SONIA, a significantly lower margin than the previous RCF. The RCF was undrawn at 31 December 2025 and remains undrawn.

Share Buy-Back Programme

In view of the Group’s balance sheet strength, cash resources and consistent operational cash generation, the Board maintains an active share buy-back programme. Since 2024 the share buy-backs undertaken by the Group have included a delegated programme implemented via Panmure Liberum, supplemented with ad hoc activities at the Board’s discretion. In 2025, the buy-back capital allocation was significantly increased to £10.7 million (2024: £5.0 million), as the Company repurchased 1,996,657 shares, at an average price of 538 pence per share. At 31 December 2025, shares in issue (excluding treasury shares held of 3.0 million) were 43.1 million (2024: 44.7 million excluding treasury shares held of 1.4 million).

Between 1 January and 13 March 2026 (being the latest practicable date prior to the results announcement), the Company has repurchased an additional 446,830 shares through the Panmure Liberum delegated authority. Therefore, since the last Annual General Meeting in May 2025 (‘2025 AGM’), the Company has in total repurchased 2,236,377 shares, equivalent to 5.02% of the issued share capital at the time of the 2025 AGM. As a result, at market close on 13 March 2026, shares in issue (excluding treasury shares held of 3,489,062) were 42,696,812.

Subject to market dynamics and corporate activity, the Board anticipates the capital allocation to the share buy-back programme in 2026 being at a broadly similar level to 2025. The standard shareholder authority (‘Standard Authority’) to buy back up to 10% of issued share capital will be proposed to shareholders at the Annual General Meeting in May 2026 (‘2026 AGM’).

The Board acknowledges the substantial cash balances held by the Company, reinforced by the consistent operating cash flow from the business. While dialogue with major shareholders encourages the Board to seek to deploy the capital to accelerate the growth of the Group, the Board remains concerned that Science Group’s relative valuation may act as an inhibitor. Indeed, it is the Board’s opinion that, on a relative valuation basis, one of the most attractive buying opportunities is the repurchase of the Company’s shares. Accordingly, if the Board considers it to be in the best interests of Science Group shareholders, additional capital allocation to the buy-back programme may be appropriate and this could potentially exceed the Standard Authority. To facilitate this option in a timely and cost-effective manner, should it be appropriate in the future, a second buy-back resolution will be put to shareholders at the 2026 AGM, such that in the event that the Standard Authority were to be fully utilised, the buy-back programme would be able to continue up to an additional 10% of the issued share capital (‘Additional Buy-Back Resolution’).

If fully utilised, the Standard Authority and the Additional Buy-Back Resolution (if approved by shareholders at the 2026 AGM) could result in a significant return of capital to shareholders and will therefore be subject to a buy-back limit of £50.0 million. For the avoidance of doubt, the Board is not at the present time intending to use the buy-back extension related to the second resolution and the Board would notify shareholders of the intent to utilise the facility as appropriate.

Summary and Outlook

Science Group has reported another robust operating performance in 2025, maintaining strong margins and extending the Group’s track record of adjusted operating profit growth, despite economic, political and market volatility. The Group also benefited from the corporate investment activity in the first half of the year resulting in an exceptional profit before tax and record earnings per share.

Over the past 15 years, the Group has delivered substantial EPS growth and since 2020, a ROCE exceeding 30% every year. As a result, shareholder value accretion has exceeded relevant market indices, while more recently the Board has materially increased capital returns to shareholders through the share buy-back programme. In 2026, the Board is also recommending a 25% increase in the dividend and will continue to monitor the buy-back programme to reflect the best interests of shareholders.

The outlook for the Group’s services and systems is influenced by external factors. As a result, in the current geopolitical environment, the Board continues to adopt a pragmatic and conservative perspective that underlying organic revenue growth may be constrained. The Board’s focus on margin, profit and correlated cash conversion will remain the operating priority in order to continue to deliver value to shareholders whilst
positioning the business to have resilience to market instability. Accordingly the Board retains a positive outlook for the year ahead.

Finally, the Board’s consistent, disciplined approach has enabled Science Group to build an exceptionally strong balance sheet with significant cash resources. This financial strength not only provides a solid foundation for the Group and the ability to sustain capital returns to shareholders, but also enables the Board to continue to seek opportunities to accelerate the growth of the existing operating businesses or to explore more material increases in the scale of the Group. In an unpredictable world, Science Group continues to provide shareholders with both resilience and opportunity.

Martyn Ratcliffe

Executive Chair

 

Finance Director’s Report

In the year ended 31 December 2025, the Group generated revenue of £111.7 million (2024: £110.7 million). The Sagentia Services Division, generated revenue of £71.5 million (2024: £72.2 million), including materials charged on projects. Systems revenue totalled £39.6 million of which £26.4 million (2024: £25.9 million) was generated by the CMS2 business and £13.2 million (2024: £12.0 million) by the Frontier business. External revenue derived from freehold property was £0.6 million (2024: £0.6 million).

Adjusted operating profit for the Group increased to £23.1 million (2024: £21.5 million), reflecting another year of strong underlying performance, despite economic and political volatility. The Group’s statutory operating profit was £40.9 million (2024: £14.9 million), a significant increase including a £24.1 million pre-tax net gain on disposal of a corporate investment in June 2025.

Adjusted operating profit is an alternative profit measure that is calculated as operating profit excluding amortisation of acquisition related intangible assets, share based payment charges, and other specified items that meet the criteria for adjustment. Further information is provided in the notes to the financial statements on this and other alternative performance measures. The amortisation charge on acquisition-related intangible assets was £4.1 million (2024: £4.4 million) and the share-based payment charge for the year was £2.1 million (2024: £2.3 million).

Statutory profit after tax was £33.3 million (2024: £12.0 million), including net finance income of £0.6 million (2024: net finance cost of £0.1 million) and a tax charge of £8.2 million (2024: £2.7 million). The tax charge increase is primarily linked to an additional £5.1 million payable following the gain on disposal of the corporate investment. Statutory basic earnings per share was 75.1 pence (2024: 26.5 pence per share).

Corporate Investment

During the first half of 2025, the Group initiated a significant investment in Ricardo. Between February and May 2025, Science Group acquired 13.5 million shares in Ricardo, equivalent to approximately 21.8% of the voting rights, at an average price of 239 pence per share (including brokerage fees), a total investment of £32.7 million funded entirely from the Group’s existing cash resources.

On 11 June 2025, a third party made an offer for Ricardo at a price per share of 430 pence, a substantial premium to the share price following the Ricardo profit warning and to Science Group’s average share purchase price. Accordingly, Science Group supported the offer and agreed to sell 12.4 million Ricardo shares, equivalent to 19.99% of the issued share capital, to the offeror at the offer price. Science Group shortly thereafter sold the remainder of its Ricardo shareholding on the open market and the aggregate cash proceeds of the sales, totalling approximately £58.0 million, were received in June 2025. In addition, during the period Science Group also received a dividend of £0.2 million, increasing total cash received to £58.2 million.

After directly attributable costs of £32.7 million, the gain on disposal of investment for Science Group was £25.5 million. After additional associated costs (linked to the gain on investment) of £1.4 million, the net pre-tax gain was £24.1 million (see Consolidated Income Statement), equivalent to a return on investment in excess of 70.0%. There is an estimated tax liability of £5.1 million on the gain, which was paid in 2025, bringing the estimated post tax gain to £19.0 million.

Finance System Upgrades

The Group successfully completed two accounting system upgrades in the year. These were the final stage in a rolling programme of migrations over recent years and the Group ended the year with all major businesses operating on the same Finance IT platform. The migrations were completed on time and with minimal disruption to business activities. As a result of the system upgrades, there is greater Finance operational efficiency and organisational resilience.

Foreign Exchange

In 2025, £30.6 million (equivalent to 27.4%) of the Group’s operating business revenue was denominated in US Dollars (2024: £32.8 million), including all of Frontier’s revenue. In addition, £2.1 million of the Group’s operating business revenue was denominated in Euros (2024: £1.8 million). The average exchange rates during 2025 were 1.32 for US Dollars and 1.17 for Euros (2024: 1.28 and 1.18 respectively).

As in 2024, to provide greater forward visibility of foreign exchange movements, the Group acquired a currency exchange instrument to cap the Sterling:US Dollar rate in relation to certain Services Division cash flows through to the end of 2025. The option instrument applied to $0.5 million per month at an exchange rate of $1.25/£1 and a further $0.5 million per month at an exchange rate of $1.30/£1, whilst still allowing the business to benefit from lower spot exchange rates when appropriate. A similar instrument has been put in place until the end of 2026 for $0.5 million per month at an exchange rate of $1.30/£1 and the Board continue to monitor FX exposure to both US Dollar and the Euro.

Taxation

The tax charge for the year was £8.2 million (2024: £2.7 million). The marked increase was primarily as a result of £5.1 million of tax payable in respect of the gain on the corporate investment activity. The overall Group tax charge has been reduced through utilising brought forward tax losses, together with Research and Development (‘R&D’) tax credits.

Science Group recognises R&D tax credits as a credit against the Income Statement tax charge, not as a reversal of operating expenses which is a common practice. While the Science Group practice reduces reported adjusted operating profit and profit before tax, the Board considers this approach to be more appropriate and inherently more conservative.

At 31 December 2025, the Group had £11.6 million of tax losses (2024: £21.4 million), predominantly relating to Frontier (£11.3 million (2024: £16.8 million)). Of the Frontier losses, £3.5 million (2024: £7.0 million) have been recognised as a deferred tax asset which is anticipated to be used to offset future taxable profits. The balance has not been recognised as a deferred tax asset due to the uncertainty in the timing of utilisation of these losses. Aside from these amounts, the Group has other tax losses of £0.3 million (2024: £4.6 million) unrecognised as a deferred tax asset due to the low probability that these losses will be utilised, although during the year, the Group was able to utilise some of these other tax losses to offset against the corporate investment gain.

Financing and Cash

Cash generated from operations, which for Science Group typically correlates with profitability, was particularly strong at £31.8 million (2024: £21.8 million), benefitting from the normalisation of a high receivables balance at the end of 2024. Group cash was also significantly boosted by the realisation of the gain on the corporate investment (net of the associated costs and tax outflow). With such strong cash inflows, during the year, £14.3 million was returned to shareholders through share buybacks (£10.7 million) and dividends paid (£3.6 million).

The Group cash balance (excluding Client Registration Funds) at 31 December 2025 was £72.6 million (2024: £38.6 million) and net funds were £61.2 million (2024: £26.8 million). Client Registration Funds of £2.4 million (2024: £2.9 million) were held at the year end in relation to pass-through payments for US regulatory processing.

In addition, the Board took the opportunity to renew the Group’s bank borrowing facilities which comprise a Term Loan and a Revolving Credit Facility (‘RCF’):

• The 2016 Term Loan was replaced with two new Term Loans with a combined value of £12.0 million for a 10-year period, secured solely on each of the Group’s freehold properties. The interest margin of 2.6% is the same as the 2016 Loan. Interest rate swaps will fully hedge the loan interest resulting in a 10-year fixed effective interest rate of approximately 7.3%, comprising the SONIA lending margin plus the swap rate. In connection with repaying the 2016 Loan early, and settling the interest rate hedging associated with that Loan, the Group realised a one-off benefit, with corresponding cash inflow, of approximately £0.6 million.
• The 2021 RCF was replaced with a new 5-year RCF of £30.0 million (with an additional £10.0 million accordion option, subject to approval). The new RCF is set at a rate of 1.95% plus SONIA. To date, the RCF remains undrawn but provides flexibility if required.

Working capital management continued to be a strong focus for the Group with debtor days sales outstanding (‘DSO’) of 33 at 31 December 2025 (2024: 36 days) reflecting the disciplined process, from initial sale to cash collection. Days sales in inventory (‘DSI’) was relatively flat at 73 days (2024: 76 days), following the normal cycle expected for the Frontier business to which this metric relates (there are minimal levels of inventory held in the CMS2 business or the Services division).

Property

Science Group owns two UK freehold properties, Harston Mill, near Cambridge (approx. 9,000 sq m on 6.5 hectares), and Great Burgh (approx. 4,000 sq m on 3.6 hectares), near Epsom. The primary function of these properties is to host the Group’s operations.

The Group charges market rents to its operating businesses and lets out part of the Harston Mill site to third parties. For the year ended 31 December 2025, the rental and associated services income derived from this activity was £3.9 million (2024: £3.9 million), of which £0.6 million (2024: £0.6 million) was generated from third party tenants. Intra-Group rental charges are eliminated on Group consolidation.

The last independent valuation of the freehold properties (December 2023) indicated an aggregate value in the range of £16.9 million to £31.6 million, although for consistency the properties are held on the balance sheet on a cost basis of £20.6 million (2024: £20.8 million).

Share Capital

At 31 December 2025, the Company had 43,143,642 ordinary shares in issue (2024: 44,738,465) and the Company held an additional 3,042,232 shares in treasury (2024: 1,447,409). The voting rights in the Company at 31 December 2025 were 43,143,642 (2024: 44,738,465). In this report, all references to measures relative to the number of shares in issue exclude shares held in treasury unless explicitly stated to the contrary.

Jon Brett

Finance Director