Flowtech Fluidpower sees first half revenues soar
Skelmersdale-based Flowtech Fluidpower has achieved a 66% increase in first half revenues of £56.5m, up from £34.2m the previous year, it announced today.
Of its three divisions, including flowtechnology and process, the power motion control business was the star performer, posting a 129% rise in turnover of £29m.
Net debt, however, has almost doubled, rising from £8.3m to £17.5m during the first half, the trading update revealed.
The AIM-listed group is the UK’s leading specialist supplier of technical fluid power products.
It said, during the six month period it has successfully expanded its footprint, technical skills, customer base and profile in the UK and Europe.
“Gross margins remain strong – acquisitions contribute strongly to first half revenues – the group expects its underlying performance to deliver another year of solid progress,” it said.
It revealed 9.1% of its 66% turnover increase was organic, with the balance coming from operations acquired in the reporting periods.
General conditions in the firm’s main market of the UK remain positive with recent reported growth from its 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 Flowtech’s European operations.
It said the group has also continued to see commercial benefit being created by the interaction of the wider industry offer it has created via its Profit Centre network in the UK, Ireland and the Benelux.
“Gross margins remain strong and in line with market expectations.”
Directors said the acquisition of Beaumanor into the Flowtechnology division in March this year significantly increased the group’s market share in the maintenance, repair and operation (MRO) market and gave access to a second warehouse based in the Midlands.
They also explained that net debt was slightly higher than they had envisaged, 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,” they said.
The board said it 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.
“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.”
Flowtech, which now employs more than 550 staff at its Skelmersdale base, a Leicester logistics centre and a Shanghai quality control operation, will release its half-year results on September 18.
