Hydraulics business reports flat sales but says it is ready for post-lockdown period
Flowtech Fluidpower, the Skelmersdale-based hydraulics specialist, said it is well placed to recover once markets return to as near as normal following the coronavirus pandemic.
Announcing results for the year ended December 31, 2019, the group revealed that its revenues were flat, at £112.418m, compared with £112.108 in 2018. Profit from continuing operations before tax fell from, £6.923m last year £4.707.
Chief executive Bryce Brooks said: “2018 was a year in which relatively buoyant conditions in the first half were replaced with more benign conditions in the latter part of the year – this, combined with the deferment of planned activity on one project resulted in a downgrade to profit expectations being reported in September 2018.
“The start of 2019 saw a return to more favourable trading conditions.
“Creating the framework for change has involved some short-term increase in resources, which, when coupled with the more negative sales environment, has affected our profit growth, but it is particularly satisfying for the executive team to see strong cash flow underlying this position, with net cash generated from operations of £13,246,000 (2018: £3,790,000), leaving net debt at the year-end of £16.6m (2018: £19.9m).
“The COVID-19 crisis has cast a considerable shadow across most sectors, but the improvement in cash resources created, and the change programme will stand the group in good stead when markets start to take shape again after the lockdown, and the board is confident that the changes being made will become a real differentiator against our competitors.”
He added: “Whilst the full impact of the COVID-19 lockdown remains unclear, it is not possible to make any accurate predictions for the remainder of the year.
“A significant part of our sales depends on the manufacturing and construction sectors, both of which have seen large scale shut-downs.
“It is possible that these sectors will begin to re-open during early May, and our current plan is to ensure that we continue to support/service our customers and react as quickly and effectively as possible if this were to happen.
“However, if there is a need to undertake further cost reductions should the lockdown extend further into the year, we must ensure that we are in a position to initiate change without detriment to our future business and our customers.
“This being said, the work undertaken as part of our restructuring activities over the past 12 months is helping our planning enormously in this regard.”
“The board believes that further progress will be made in improving productivity across the group and looks forward to updating investors as we make further progress during the remainder of 2020.”
Chairman, Malcolm Diamond also revealed that he will step down from the role after this year’s annual general meeting, to be replaced by his colleague Bill Wilson.
