City round-up: Speedy Hire; James Halstead; Flowtech Fluidpower

Speedy Hire, the Newton-le-Willows-based plant and tool hire group, has announced the appointment of a new chief executive, with effect from October 1.

Dan Evans, who is currently chief operating officer and has been with the company for 14 years, will replace Russell Down, who announced on Ma 11 this year that he would be retiring, after seven years with the company.

In his current role Dan is responsible for the group’s operational performance in the UK and Ireland including sales, business development and marketing.

Russell Down will step down from the board and his role as chief executive on September 30, 2022. In accordance with his contractual term he will remain employed by Speedy until May 10, 2023 ensuring an effective transition.

David Shearer, chairman, said: “I am pleased that after a thorough recruitment process supported by external consultants that Dan Evans has been appointed as chief executive.

“Dan knows our customers and the business well, has performed exceptionally as chief operating officer, and has been integral to the development of our strategy with Russell and the board. I look forward to working closely with Dan on the continuing execution of this growth strategy.

“I would like to thank Russell once again for his significant contribution as chief executive and wish him well for the future.”

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James Halstead flooring

Bury flooring group, James Halstead plc, said its turnover will be up to 10% ahead off the previous year, in a trading update for the year to June 30, 2022, today.

The sales growth has been in all its main markets, it confirmed.

It said being, principally, a UK manufacturer has definitely been advantageous throughout the past two years as customers in its main markets look to the advantages of local supply in a way not seen for a generation, and while this is tempered by the difficulties, delays and costs that it faces in export transportation of goods to its global customers, it says it has the experience to manage the situation.

The inexorable increases in input costs, be it energy, fuel or international freight rates have affected margins. The group said, as a manufacturer it requires volume to maintain its economies of scale and it operates in a sector that has excess manufacturing capacity.

Consequently, in seeking to protect its volume, it has been very cautious in its approach to price increases in regard to scale and timing. Selling price increases have consistently lagged cost rises, a policy based on both fairness to customers and awareness of possible migration to competitors.

Nevertheless, it said, during the year it has been able to pass costs on to the customers in all its markets, either as price uplift or by delivery surcharges, in some cases both. Inevitably delays in increasing prices have had an effect on margins however the actions the business has taken have helped to contain this impact. Importantly, volume has been preserved.

The group said its decision to significantly increase stock holding by utilising its significant cash resources gives it a hedge against very likely increased costs and shortages while giving up modest interest receipts. These stock levels are historically exceptional and are not sustainable over the long term but against the backdrop of the current world stage are defensive and risk limiting.

On the positive side the year has, in many markets, seen strong demand for commercial contract flooring relative to last year. To a degree this demand increase results from the low comparatives from sectors such as hospitality and retail where this year has been more normalised.

The group said: “This update is in regard to the trading conditions that have prevailed in the year. It is still the case that our balance sheet remains strong and that the company remains ungeared with positive cash balances. The company continues to be in robust shape to weather the conditions it faces.”

Halstead said it will announce its full results for the year to June 30, 2022, around the end of September 2022.

Reacting to today’s announcement, Panmure Gordon analyst, Adrian Kearsey, said: “James Halstead delivered a slightly mixed FY22 pre-close update. In the 12 months to Jun-22 sales were higher than we expected, up 9-10% YoY. However, a cautious stance on pricing and cost headwinds have constrained margins.

“Consequently, we are increasing our FY22 sales forecast to £292m (+8% upgrade) and modestly reducing our FY22 PBT forecast to £50.7m (2% adjustment). It is important to appreciate this is still only 1% below FY21 profits, which were an all-time record for the group.”

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Flowtech Fluidpower’s Skelmersdale base

Flowtech Fluidpower, the Skelmersdale-based hydraulics group, said it has delivered a half year performance in line with board expectations.

In a trading update for the six months to June 30, 2022, it said, on a like for like trading day basis, group revenue has increased by 4.8%, to £57.5m, relative to the comparative 2021 period.

The Flowtech division saw revenues rise from £26.7m to £26.8m, Flowtech Group Solutions increased its turnover from £20.1m in 2021 to £21.2m, and Flowtech Group Services achieved sales of £9.5m compared with £8.5m a year ago.

Pre IFRS 16, net debt was £19.7m at June 30, 2022, (HY1 2021: £13.3m), £5.3m of headroom within the group’s banking facilities. Given the supply chain related pressures encountered in late 2021, which have continued into this period, Flowtech decided to continue its investment in inventory, which increased by £11m in the 12-month period to June 30, 2022.

This has supported delivery of a solid trading performance in the first half of 2022. Inventory levels are a key focus of management – the business expects a degree of unwind of this position in the remainder of the year as it benefits from a more predictable supply chain environment.

Looking ahead, Flowtech said: “We recognise the current challenges, not least those linked to inflationary pressures and the wider macroeconomic environment – however, we continue to work hard to mitigate these risks and are pleased with the progress that has been made with implementing the necessary operational efficiencies.

“We look forward to the impact of the general investment we have made, specifically the introduction of our new e-commerce website on 17 May 2022, and our broader e-business agenda which should provide attractive returns over the coming years.”

The group is planning to announce unaudited half-year results for the period ended June 30, 2022, on Wednesday, August 3, 2022.