Group Trading Update & Notice of HY Results

RNS Number : 8111U

Flowtech Fluidpower PLC

17 July 2018

 

NEWS RELEASE Issued on behalf of Flowtech Fluidpower plc Immediate Release

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.  Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

FLOWTECH FLUIDPOWER PLC

 ("Flowtech Fluidpower", the "Group" or "Company")

Group Trading Update

and

Notice of Half-year Results

"Flowtech Fluidpower has successfully expanded its footprint, technical skills, customer base and profile in the UK & Europe"

"Gross margins remain strong - Acquisitions contribute strongly to HY1 revenues - the Group expects its underlying performance to deliver another year of solid progress"

London: Tuesday, 17 July 2018:  AIM listed specialist technical fluid power products supplier Flowtech Fluidpower plc (LSE: symbol FLO), is pleased to announce the following unaudited trading update on its performance for the six-month financial reporting period ended 30 June 2018: 

GROUP Trading Update AND FINANCIALS

Revenue for the period ended 30 June
Divisions:	HY1 2018 Unaudited £'m	HY1 2017 Unaudited £'m	Growth
Flowtechnology	23.5	19.3	21%
Power Motion Control (PMC)	29.0	12.7	129%
Process	4.0	2.1	91%
Total Group revenue for the period	56.5	34.2	66%
Net debt	17.5	8.3

Group revenue during the first six months of the current year increased by 66%, of which 9.1% was organic with the balance coming from operations acquired in the reporting periods.  General conditions in our main market of the UK remain positive with recent reported growth from our industry body, BFPA of 6.7%†, most of this advance being driven by product price increases across the sector.  Similar conditions are being experienced in our European operations. In addition to this, we have continued to see commercial benefit being created by the interaction of the wider industry offer we have now created via our Profit Centre network in the UK, Ireland and the Benelux.  Gross margins remain strong and in line with market expectations.

The acquisition of Beaumanor into our Flowtechnology division in March of this year significantly increased the Group's market share within the maintenance, repair and operation (MRO) market and gave access to a second warehouse based in the Midlands. The Board is again pleased to report that in the four months since the acquisition was completed, the reaction from staff, customers and suppliers of Beaumanor, together with its sister PMC business, Derek Lane, has been positive, and, our work on extracting long-term procurement benefit remains on track to bear fruit in 2019 and beyond.

Net debt at 30 June 2018 was £17.5m is slightly higher than we had envisaged; this is primarily due to higher stocking levels because of longer lead times.  We expect net debt at the year-end to be in the range £16m to £17m, and reduce thereafter.

SUMMARY

As stated at our AGM in June, our acquisition programme has created new complementary services, brands, products and customer sectors.  Therefore, the Group will use 2018 as an opportunity to consolidate the processes and systems in place and start to exploit synergy opportunities as well as continue to target organic growth, in particular:

·      Expanding inter-company procurement and stockholding benefits by using logistics centres in Skelmersdale (FTUK) and Leicester (Beaumanor)

·      Undertaking a wider operational review to identify efficiencies that could be achieved through geographic consolidation of existing assets

·      Upgrading information systems, with Sage X3 (now named "Enterprise Management") financials to be implemented Group-wide by the end of the year delivering a single reporting system for the Group

Beyond this, the prospects for further acquisition activity in the medium to long term across our key geographies and, in our primary product and supplier channels, remains positive.

NOTICE OF RESULTS

The Group will release its Half-year results on Tuesday, 18 September 2018.  The announcement will be available to view and download from the Company's website www.flowtechfluidpower.com.  In addition, a presentation of these results will also take place on the day via conference call facility; further information can be requested from TooleyStreet Communications, details of which are shown below. 

Notes:

† British Fluid Power Association

Enquiries: FLOWTECH FLUIDPOWER PLC Sean Fennon, Chief Executive Bryce Brooks, Chief Financial Officer Tel: [phone] Email: [e-mail]

Zeus Capital Limited (Nominated Adviser and Joint Broker) Andrew Jones, Alistair Donnelly (corporate finance) Dominic King, John Goold (sales & broking) Tel: [phone] finnCap Limited (Joint Broker) Ed Frisby, Kate Bannatyne (corporate finance) Rhys Williams, Andrew Burdis (sales & broking) Tel: [phone] TooleyStreet Communications (IR and media relations) Fiona Tooley Tel: [phone] or email: [e-mail]

EDITOR'S NOTE
ABOUT FLOWTECH FLUIDPOWER PLC Founded as Flowtech in 1983, the Flowtech Group is the UK's leading specialist supplier of technical fluid power products.  The business joined AIM in 2014.  Today, the Flowtech Group has four distinct divisions:
Division:	What we do:	Locations:
Flowtechnology	Focus on supplying distributors and resellers of industrial MRO products, primarily serving urgent orders rather than bulk offerings.  It offers an unrivalled range of OEM and Exclusive Brand products to over 3,400 distributors and resellers.  The division has created a definitive co-ordinated approach to three major catalogue brands in the UK market place, providing the definitive source for fluid power products, containing over 100,000 individual product lines and are distributed to more than 80,000 industrial MRO end users.	Flowtechnology Benelux (Deventer) Flowtechnology China (Guangzhou) Flowtechnology UK (Skelmersdale) Indequip (Skelmersdale) Beaumanor (Leicester)
Power Motion Control (PMC)	Specialise in the design, assembly and supply of engineering components and hydraulic systems, further enhanced by a service and repair function.	Primary Fluid Power (Knowsley) Nelson Fluid Power- (Dublin, Lisburn, Dungannon) TSL Fluidpower (West Yorkshire) Albroco (Knowsley) Hydraulics & Transmissions (Ludlow) Hi-Power Hydraulics (Cork, Dublin, Belfast Manchester) Hydroflex Hydraulics (Brussels, Rotterdam and OudBeijerland) Hydraulic Equipment Supermarkets (Birmingham, Durham, Gloucester, Leeds) Branch Hydraulics (Gloucester) Derek Lane & Co (Newton Abbot)
Process	Focus on the supply of industrial components and solutions to the process sectors.	Hydravalve, (Willenhall) Orange County (Spennymoor)
Onsite Services	In 2018 the Group will extend its service offering to include Onsite technical maintenance through highly skilled engineers.	HES Onsite (Birmingham, Durham, Leeds, Gloucester)
All four of the Group's divisions have overlapping product sets, allowing procurement synergies to be maximised.  The above divisions are supported by a centralised back office team at the Skelmersdale operation, shared logistics centres in Skelmersdale and Leicester and, a procurement and quality control team in Shanghai.  In total, the business now employs over 550 people.  For more information please visit, www.flowtechfluidpower.com

 

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