New Flowtech chief promises ‘self help’ action to arrest disappointing performance
Mike England, the new chief executive of hydraulics business Flowtech has reported ‘good progress’ in arresting a slide in profits.
Unaudited revenues reported to the stock market this morning show the Skelmersdale-headquartered increased top line income by 2.8% in the first half of 2023 compared to last year.
However, while growth achieved in both the Solutions (11.5%) and Services (9.8%) segments was pleasing, the company said, this offset a “disappointing performance” within the Product Distribution segment where revenue declined by 5.6%.
The second quarter of the year provided more challenging trading conditions across each segment than the first quarter.
Costs have increased by £1.0m (6.2%), compared to the comparative 2022 period.
Approximately two thirds of which are salaries, but the staff numbers fell by 5.8% compared to 2022 this was offset by inflation on wages and other costs alongside the impact of investment in senior personnel.
Profit before tax was £1.6m, down from the £3.1m reported in the same period in 2022.
In a statement, England said: “The performance of the Product Distribution segment was disappointing. We are pleased with the performance in the Solutions and Services divisions which both continued to show strong growth at attractive margins.
“Despite increasingly challenging economic conditions, overall Group revenue increased by 2.8% in the period with a more positive performance in our solutions and services segments and a weaker performance in the product distribution segment, as previously reported. We have continued to make positive progress on working capital management, continuing to improve our debt position whilst maintaining tight cost controls.
“We expect these market headwinds to continue through H2 23 and into 2024 but I am pleased to report good progress is being made in deploying an immediate performance improvement plan and the refreshed strategy, strengthening the leadership team and simplifying the operating model building the capabilities to deliver mid-term scalable growth in a highly fragmented market.”