City round-up: Byotrol; Surface Transforms; Flowtech Fluidpower; Frenkel Topping
Byotrol, the Daresbury-based hygiene group, has seen sales fall and losses widen in the year to Mach 31, 2023, but is confident of returning to profitability.
Turnover was £4.592m, down from £6.327m, while a pre-tax loss of £1.825m was up on the previous year’s £1.245m loss.
Vivan Pinto, presenting his first shareholder report as new chief executive, said the dip in turnover was the result of “a proactive initiative to reduce complexity and increase focus to improve the margins and fundamental health of the company.”
He added: “We have now completed the rationalisation of our portfolio, and completed the reorganisation of our business model. We are now poised for growth, despite the recessionary economic environment, as we continue to roll out our new technologies across Animal and Human health, where to date we have had a positive reception from our customers.”
Cash at the year end stood at £700,000, versus £1.1m the previous year.
Byotrol said the results were in line with expectations.
Chairman, Trevor Francis, said: “I remain optimistic that we can flourish in the substantial and global opportunities in infection control, and I have long been a key supporter of our mix of IP and product sales.
“I have, for some time, thought we needed to do better at the product sales side of our business and I believe we now have the team and the systems to do just that. Certainly, all the key indicators on our business health in that respect are moving apace in the right direction.
“I firmly believe (and can see that) your company is becoming stronger. Following the acquisition of Medimark, it took some time to align our processes and operating systems, but these are now in good shape and contributing significantly in our strategy. With the changes the new team is now making I am confident that this work will soon be recognised in due course through improved results. Your board remains very engaged and highly confident in the company’s positioning and in its financial prospects. We look forward to a year of significant revenue growth and returning to profitability.”
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Surface Transforms carbon rotor brake
Knowsley-based specialist high performance brakes manufacturer, Surface Transforms, is another company confident of profitability in its current fiscal year, despite the impact of production problems.
In a trading update for the six months to June 30, 2023, it said, as previously reported, sales for the six months grew to £3.3m (H1 2022: £2.9m) representing an overall increase of 14%. Within this total, the volume of manufactured discs during the period increased by more than 80%, reflecting the improvements made in production during 2023 – the remainder of the sales in both periods was pre-production development income.
Gross cash by June 30, 2023, was £4.5m, compared with £14.9m at December 31, 2022. Capital expenditure in the six months to June 30, was £5.4m with the balance of cash movement arising from the the previously announced production issues resulting in delayed sales and non recurring operational costs.
The improvement in June output rates, reported in the recent AGM statement, has continued into July. Customer arrears have been reduced over the past six weeks. Accordingly, the board maintains its 2023 revenue expectations.
Installation of extra capacity is still on track with a further £3.4m of capital expenditure expected in the second half of this year. This extra capacity will provide resilience during the continuing ramp up in the second half of 2023 and also underpins the projected further near doubling of sales in 2024.
Revenue expectations for 2023 and 2024 are unchanged. The production problems of the past six months have, inevitably, had cost and cash implications. However, the company said cash has been managed by prudent cash management, the use of some contingencies in the original plan and the phasing of capital expenditure for the next phase of capacity expansion.
Reflecting the board’s expectation of continuing operational performance, gross cash at December 31, 2023, is now expected to be no worse than £1m lower than previous estimates. The board still expects the company to be profitable in the second half of 2023.
The company said it is continuing its work with customers on converting its prospective contact pipeline into firm orders with further announcements expected in the current financial year.
The 2023 interim results will be announced on September 27.
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Flowtech Fluidpower’s Skelmersdale base
Skelmersdale-based hydraulics group, Flowtech Fluidpower, said today that overall group revenue has grown by 2.6%, to £59m, in the six months ended June 30, 2023, but revealed EBITDA is behind forecast.
The Solutions and Services divisions have continued to operate well, showing strong growth, however, the performance of the Flowtech division has been disappointing with a decline in revenue of 5.7%.
Given the lower gross margins in the Solutions and Services divisions and the underperformance of the Flowtech division, Group EBITDA in the first half of 2023 is behind board expectations.
Pre IFRS 16 net debt was £15.6m as at June 30, 2023, compared with £19.7m in the same half a year ago, a reduction of £4.1m in the past year, leaving an unutilised £9.4m on the group’s £25m banking facilities. Net debt is expected to reduce in the second half of the year.
Mike England, who took over as CEO in April, said: “In the Flowtech division, specific actions are in flight to address commercial and operational shortfalls adversely impacting performance, some of which require targeted new capital investment and some to address legacy issues; we intend to comment more on this at the time of the interim results.
“We are generally pleased with the HY1 growth and contribution from our Solutions and Services divisions. There are, however, adverse market headwinds into HY2 with several OEMs (original equipment manufacturers) citing a slowdown in project velocity and a more general cooling across the broader industrial markets. For these reasons the board now expects the out-turn for FY23 to be significantly behind previous expectations.”
Market expectations compiled by the company prior to this announcement for the year ending December 31, 2023 were: Group revenue c.£119.4m; underlying EBIT of c.£9.9m; and profit before tax of c.£8.8m.
Mr England added: “In my first three months, I have made early decisive decisions to establish a stronger platform for market share growth and improved margins in 2024 and beyond. This has included a swift programme of change in managerial leadership and implementing the plan to further simplify our operating model to release the full potential of the group, improving the overall service and value proposition for our customers and to deliver greater efficiencies as we scale.
“As part of this, we will continue to maintain tight control of our costs whilst making the right strategic investments for the future. Our focus on cash management will continue; this will include a refreshed review of all aspects of inventory management where we believe there is further progress to be made.
“Despite these current challenges, I am excited by the potential for the group given the quality of the brand, knowledge and technical capability of our people, the depth and breadth of the product and engineering service offering and the opportunity for expansion, market share growth and the potential for margin improvement.”
The group is planning to announce unaudited interim results for June 30, 2023, on Wednesday, August 30.
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Mark Holt
Frenkel Topping Group, the Salford-based specialist professional and financial services firm operating in the personal injury (PI) and clinical negligence (CN) space, has extended its ‘Working in Partnership’ programme with a 50:50 joint venture between its IFA arm and Birmingham-based Lime Solicitors, reaching double digits in partner firms and expanding its work with the country’s top-tier law firms.
The group’s ‘Working in Partnership’ programme has nurtured strong relationships in recent years with law firms who share the focus on ‘the whole client’ and recognise the importance of collaboration between key services and all affected parties after a life-changing injury.
The group now has 10 JVs with leading law firms. Over the financial year ending December 31, 2022, the total assets under management (AUM) added from Frenkel Topping’s JV partners was £32.7m, which represents around 25% of total AUM added during the year. Mutually beneficial JVs is a core component of Frenkel Toppings five year growth strategy and the company continues to work on further similar opportunities.
The joint venture sees Lime Solicitors, ranked in the Chambers Guide to the legal profession and in the Legal 500 as experts in their field, join with Frenkel Topping’s independent financial advice division, to provide services under the trading name Lime Wealth Management Limited.
Part of Shakespeare Martineau, one of the 55 largest law firms in the country, Lime operates nationwide and specialises in personal injury, medical negligence inheritance disputes, power of attorney and deputy disputes and professional negligence issues.
Two senior partners at Lime, Tony Hannington and Mark Beesley, will act as directors of the JV company alongside chief operating officer, Mark Holt, and chief financial officer, Elaine Cullen-Grant, from Frenkel Topping.
Mark Holt said: “We have partnered with one of the most high calibre firms in our field in our 10th joint venture with Lime. Tony and his team have an incredible amount of expertise and experience and understand the real impact of significant injury on daily life.”
Tony Hannington, head of Lime Solicitors, said: “Lime have signposted clients for specialist advice for a number of years and after discussions with Frenkel Topping over several months, we knew that they were the right business for us to join forces and bring our respective strengths together for the benefit of our clients.”
Richard Fraser, Frenkel Topping CEO, said: “Joint ventures like this one expand our network of new business referrers and demonstrate our commitment to innovate and enhance our services, firstly to benefit our clients and then to support our objective to increase shareholder value.”
