Hydraulic specialist hit by Brexit jitters
Operating profits slipped by just under three per cent to £4.3m at Cheshire firm Flowtech Fluidpower.
The pneumatic and hydraulic specialist released its six month figures this morning.
Underlying operating profit was up by seven per cent to £6.1m and revenues were up by 5.7% to £59.6m.
The firm said trading has been affected by nervousness surrounding Brexit but is confident about the future.
Non-executive Malcolm Diamond said: “We are pleased with the progress being made across our strategic initiatives and we remain confident in the long-term outlook for the group.
“In the short term we expect more subdued trading conditions and it is important we remain focused on controlling what we can control, in particular our cost improvement and working capital initiatives.”
A company statement added: “With great progress being made in our strategic objectives, the board remains confident in the outlook for the group as we seek to improve our complementary revenue streams in components and services. This confidence is reflected in our continuing attitude towards dividend growth.
“However, after a prolonged period of solid organic growth across the group, Brexit induced nervousness in the UK and Ireland is impacting our markets and over the summer months we have experienced a period of reduced sales activity.
“Whilst our heavy bias towards servicing Maintenance, Repair and Overhaul markets gives us natural defences against significant setbacks, our view is that a return to organic growth will be suppressed until the political situation is resolved. We expect little or no sales growth for the remainder of 2019 and on this basis, we advise that the likely 2019 out-turn for profit before tax will be in the range of £10.8m to £11.2m.
“The board also believes that current conditions are likely to persist well into 2020 before returning to long-term growth trends. As a result, we expect revenue growth to be suppressed relative to previous expectations. We are focused on controlling what we can control and are actioning the cost improvement initiatives described above. Accordingly, we hope to significantly mitigate the effect of reduced revenue growth on adjusted profit before tax in 2020. “
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.
