Trading update points to continued progress for AIM-listed Flowtech

AIM-listed technical fluid power products specialist Flowtech Fluidpower expects to achieve another year of solid progress.

In a trading update covering the six months ended June 30, today, the Skelmersdale-based business said it has achieved further organic growth of 2.9%, and reduced net debt by £1.1m in the first half of its financial year.

It added: “The group expects to achieve another year of solid progress – results are in line with market expectations.”

Total group revenue for the six month period was 5.7% ahead, at £59.6m. This included £50m of income from the components division – a 6.5% improvement – and £9.6m from services, a 1.4% increase.

Net debt now stands at £18.8m.

On a like-for-like trading days’ basis, organic growth was 2.9%, the balance resulting from 2018 acquisitions.

The second quarter saw a reduction in organic revenue growth, relative to the first, reflecting the wider economic conditions, said Flowtech today.

The net debt reduction compares favourably with a net debt increase of £3m for the comparative period in 2018.

The £1.1m reduction in debt is after making contingent consideration payments of £1.6m relating to prior year acquisition activity.

Flowtech said: “Our continuing focus on working capital management should lead to further debt reduction by the end of 2019.”

In summary, it added: “Overall, our trading in the first half is in line with full year market expectations and we continue to expect to deliver another year of solid progress, despite less buoyant market conditions.

“The directors remain confident about the future for the group and look forward to updating shareholders on its cost reduction and working capital initiatives at the time of the half-year results.”

These will be announced on Tuesday, September 24.

Flowtech Fluidpower was included among 94 North West firms in June that made up the 2019 ‘1,000 Companies to Inspire Britain’ list, published by the London Stock Exchange Group.

In April the firm reported improved revenues and pre-tax profits, from continuing operations, for the year to December 31, 2018. It 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.