Fluid power specialist on right track and confident of future

Technical fluid power products specialist Flowtech Fluidpower reported improved revenues and pre-tax profits, from continuing operations, for the year to December 31, 2018, today.

The AIM-listed group achieved turnover of £111.1m, compared with £78.3m a year ago. Pre-tax profits of £6.92m were up from £6.04m in 2017.

Skelmersdale-based Flowtech has also proposed a 5% increase in the full dividend, from 5.78p to 6.07p per share.

Net debt, however, has risen from £14.9m to £19.9m, today’s figure show.

Flowtech said it had achieved 25% growth in underlying operating profit on the previous year.

It also completed the successful acquisition and integration of Balu and its subsidiaries; Beaumanor Engineering and Derek Lane & Co.

The group said it had made significant progress with establishing a components and services divisional structure under a single chief operating officer role.

Last September the firm announced that chief executive Sean Fennon was stepping down at the end of the year after nine years in the role.

New board appointments included Russell Cash as chief financial officer, Bill Wilson as independent non-executive director and the appointment of Bryce Brooks to chief executive.

The group said the executive management team is enhanced and focused on cost and working capital management.

Bryce Brooks said today: “The board firmly believes that a profit-sharing culture across the group focused on a ‘return on capital’ metric at a local level, is one of the keys to developing a sustainable organisation that will reward investors over the long term, and the executive team has a clear plan to assist all our other profit centres in achieving this target by the end of 2019.”

Russell Cash added: “There has been a very clear focus on managing working capital towards the end of 2018 and into 2019.

“We are expecting the 2018 adverse trend to reverse, and progress made in 2019 to date has been very encouraging.

“Our efforts are spread across each of the three working capital categories and across all areas of our business.”

And, in a trading update for the first three months of the new financial year, the business has today reported a 14% increase in revenues of around £30.1m, of which 4% was organic.

Today’s update also said: “From a point that is now well into 2019, it remains disappointing that at the date of this report we are yet to gain clarity on the probable trading settlement between the United Kingdom and its main European trading partners after Brexit.

“Despite this, our sector has remained resilient and we remain confident that whatever the outcome, any potential short-term effects will be suppressed by the strength of the wider group and our position as the UK’s leading fluid power distributor.”

The company employs more than 600 people across its business operations in the UK, Holland, Ireland and China.