Trading update - nine month period ended 30.9.18

RNS Number : 8228E

Flowtech Fluidpower PLC

23 October 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")

Trading Update

London: Tuesday, 23 October 2018:  AIM listed specialist technical fluid power products supplier Flowtech Fluidpower (LSE: symbol FLO), issues the following unaudited Q3 Trading Update for the nine-month financial reporting period ended 30 September 2018:

GROUP Trading Update AND FINANCIALS

Revenue for the nine-month period ended 30 September 2018
Divisions:	YTD 2018 Unaudited £'m	YTD 2017 Unaudited £'m	Growth
Flowtechnology	34.8	28.3	23%
Power Motion Control (PMC)	42.9	21.7	98%
Process	6.0	4.5	33%
Total Group revenue for the period	83.7	54. 5	54%
Net debt	17.6	12.1

Group revenue during the first nine months of the current financial year increased by 54%, of which 6.7% was organic with the balance coming from operations acquired in the reporting periods.

Since reporting our HY1 2018 results and market update in September the business has experienced a solid trading period which remains in line with market expectations.  Gross margins also remain in line with previous reports.  Trading from the Profit Centres acquired as part of the Balu acquisition in March, being Beaumanor Fluidpower and Derek Lane, continues to be in line with the plan outlined at the time of the acquisition and the outlook for both as part of the Group's efforts to extract synergy benefits remains good. 

Net debt at 30 September 2018 was £17.6m.  Net cashflow from operating activities in the quarter to 30 September 2018 was +£4.1m (2017: +£1.4m), which was also in line with expectations.

PEOPLE

The Board looks forward to Russell Cash taking up his position of Chief Financial Officer on 1 November.  Working with the management team, his focus will be to optimise cash generation and extract the operational cost efficiencies available following the strong acquisitive and organic growth seen in recent months.

OUTLOOK

As previously reported, the buoyant conditions seen in the first half have now given way to a steadier pace of growth.  The Board remains positive, although cautious, about overall growth rates for the fluid power market as we move into 2019, and this view is supported by the very broad spread of sectors within the Group's customer portfolio, both in the UK, and its euro-based operations.

Regarding the order for c.£1.5m to design, manufacture and supply hydraulic cylinders and power units to an appointed sub-contractor on the Thames Tideway project, reported last month, the Board is pleased to confirm that a return to positive progress has been made. A further update will be given in the full year trading update in January 2019.

SUMMARY

The Group is expected to deliver another year of positive progress.  Whilst the scope for significant growth by acquisitive means remains compelling, our short-term focus is firmly on management actions and investment that can deliver sustained operational improvements, procurement benefits and wider Group synergies.  Overall, the Board remains confident in the Group's strategy and the outlook for future growth remains strong.

INTERIM DIVIDEND

As previously announced, the half-year dividend of 2.03p will be paid on 26 October 2018, to those members who were on the register at close of business on 28 September 2018.

ENQUIRIES:

FLOWTECH FLUIDPOWER PLC

Malcolm Diamond MBE, Non-Executive Chairman

Bryce Brooks, Chief Executive Officer and 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 and broking)

Tel: [phone]

FinnCap Ltd (Joint Broker)

Ed Frisby, Kate Bannatyne (corporate finance)

Rhys Williams, Andrew Burdis (sales and broking)

Tel: [phone]

TooleyStreet Communications (IR and media relations)

Fiona Tooley

Tel: [phone] or email: [e-mail]

About Flowtech Fluidpower plc
Founded as Flowtech in 1983, the Flowtech Fluidpower Group is the UK's leading specialist supplier of technical fluid power products.  The business joined AIM in 2014.  Today, the 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 5,000 distributors and resellers.  The catalogue is recognised as the definitive source for fluid power products, containing 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 and is further enhanced by a service and repair function.	Primary Fluid Power (Knowsley) Nelson Hydraulics (Dublin, Lisburn, Dungannon, UK) TSL Fluid Power (West Yorkshire) Albroco (Knowsley) HTL (Ludlow) Hi-Power Hydraulics (Cork, Dublin, Belfast Manchester) Hydroflex (Brussels, Rotterdam and OudBeijerland) Hydraulic Equipment Supermarkets (Gloucester, Leeds, Birmingham, Durham) Branch Hydraulic Systems (Gloucester) HES Tractec (Gloucester) HES Automatec (Gloucester) HES Lubemec (Gloucester) Derek Lane & Co (Newton Abbot, Devon)
Process	Focus on the supply of industrial components and solutions to the process sectors.	Hydravalve (Willenhall) Orange County (Spennymoor)
Onsite Services	During 2018, the Group is extending its service offering to include Onsite Technical Maintenance through highly skilled engineers.	HES Onsite (Durham, Leeds, Birmingham, 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 site and a procurement and quality control team in Shanghai.   In total, the business employs over 600 people.  For more information please visit, www.flowtechfluidpower.com.

 

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