Science Group Boosts Buyback Target as H1 Profit Rises Despite Revenue Dip

Science Group PLC (AIM:SAG) announced on Monday a planned decrease in its first-half revenue for 2026, a result of a strategic move away from low-margin defence sales. Despite the lower top-line figure, the company reported higher adjusted operating profit and earnings per share, prompting an increase in its full-year share buyback target.

H1 Financial Highlights

The UK-based services and systems company saw its revenue for the first six months of 2026 fall to £47.20 million. However, this was a deliberate outcome of reducing pass-through defence revenue, which in turn improved the company's profitability and operating margin.

Key financial metrics reported for the period include:

• Adjusted Operating Profit: Increased to £11.47 million.
• Adjusted Earnings Per Share: Rose to £0.14.
• Pretax Profit: Stood at £8.15 million.
• Net Income: Reached £5.98 million.

Strategic Rationale and Sector Headwinds

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Science Group's decision to scale back low-margin defence work was the primary driver of the revenue decline but was successful in enhancing overall margin quality. The company noted that its Services division was also affected by external factors, including geopolitical turmoil and delays in UK defence sector procurement, which slowed investment decisions.

Despite lower revenue in its CMS2 division, profit was lifted by the operational timing of certain contracts, according to the company's statement.

Increased Buyback and Outlook

Reflecting confidence in its financial position, Science Group raised its guidance for its 2026 share buyback programme, now expecting it to exceed £20 million.

The company anticipates a return to growth in the second half of the year, with the Services division expected to lead the recovery. Furthermore, management expects its Sagentia Defence unit to see improved performance following the anticipated release of the UK Defence Investment Plan.