Manufacturer to accelerate cost-cutting as pandemic pushes group into the red
Hydraulics group Flowtech Fluidpower is to accelerate its cost-saving plans after the pandemic caused it to record a first-half loss of nearly £1m.
Revenues were down 22% in the first half of the year, to £46.6m, and the group said its response to Covid-19 has been “resilient”.
But it was already making changes to cut costs, which has taken on greater urgency.
Flowtech’s non-executive chair Roger McDowell said: “We were already engaged in a process of rationalising operating sites and reducing costs, but, given the ongoing uncertainty, it is now imperative we accelerate this activity.”
The company said it “remains confident” of delivering annual cost savings of £1.6m, in addition to the Covid-related action of cutting 25 jobs.
The group employs 600 people and is headquartered in Skelmersdale, where it has its Flowtechnology UK, Indequip and Primary Fluid Power Components sites. Its has operational sites in Knowsley and a centralised back office team in Wilmslow.
It recently moved its Primary Fluid Power Components function to Knowsley and the logistics operations of Hydravalve from Willenhall.
It has previously announced its two Irish businesses – Nelson Hydraulics and Hi-Power – would merge their operations and relocate most warehousing functions to the UK. Changes are also planned for its Gloucester sites, where it will move out of two properties and cut some jobs.
McDowell added: “Given the impact of COVID-19 it is difficult to predict underlying levels of demand so notwithstanding our plans to achieve further efficiency and organic growth coupled with our inherent resilience we will be affected by overall market conditions and will react appropriately.”
