Flowtech Fluidpower in bullish trading update

Flowtech

AIM-listed technical fluid power products specialist Flowtech Fluidpower predicts another year of positive progress in a trading update today.

The Skelmersdale-based firm issued a third quarter note for the nine-month financial reporting period ended September 30.

Group revenue during the first nine months of the current financial year increased by 54% to £83.7m, of which 6.7% was organic, with the balance coming from operations acquired in the reporting periods.

Since reporting the first half 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 September 30, was £17.6m.

Net cashflow from operating activities in the quarter to September 30, was £4.1m, compared with £1.4m last year, which was also in line with expectations.

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

Bryce Brooks, 53, took the role of chief executive with immediate effect, and continues to fulfil the role of chief financial officer until the appointment of new CFO, Russell Cash, on November 1.

The company said today: “The board looks forward to Russell Cash taking up his position of chief financial officer. 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.”

Looking forward, the group said: “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.”

It added: “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.”

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