Hydraulics group suffers lower sales and deeper losses, but ‘foundations are in place’

Flowtech Fluidpower, the Skelmersdale-based hydraulics business, has reported lower revenues and deeper losses for the year to December 31, 2023.

The unaudited results for the year show that turnover fell from £114.766m to £112.095m and pre-tax losses widened from £5.572m the previous year to £12.102m.

However, net cash rose from £5m to £8.2m and net debt fell from £16m to £14.7m.

The group has also increased the dividend, from 2.0p per share to 2.1p per share.

During the fiscal year it said it simplified the operating model to build a platform to unlock the full margin potential of the group.

A new leadership team is in place, and overheads have been tightly managed, together with a 7.5% headcount reduction in the second half.

There is a continued focus on working capital management delivering a £1.8m improvement.

Also, a nine per cent improvement was achieved in product distribution stock availability.

The group restructured sales and marketing, together with a new catalogue prepared and a reset of the digital growth strategy

Customer complaints have fallen by 50% and the group has a customer satisfaction rating of 73.1.

Non-executive chair, Roger McDowell, said: “We have addressed what we believe to be the root causes of underperformance in our GB Product Distribution business and are confident that 2024 will see the beginnings of a return to historic EBITDA margins in this side of our business.

“We are pleased with the progress that has been made in other areas of our business, most notably in Ireland where we have achieved significant growth.”

He added: “As we look ahead to 2024 and beyond, despite the continued challenging external market, I am enthusiastic and optimistic.

“We have a new and energised leadership team, with a Performance Improvement Plan now beginning to deliver measurable results and clarity of our strategy which serves to unlock the full potential of the group across six defined EBITDA growth engines.”

“We are well positioned to capitalise on the opportunities available to us. We have much work to do, but we have a strong team in place and an unwavering determination to provide a solid foundation for sustained growth and value creation in the years to come.”

Mike England, CEO, said: “Many of the foundations needed to recover performance and scale have been put in place and we are confident that 2024 will be an important turning point for Flowtech.

“Our outlook is positive and optimistic. Despite a challenging market, with the ongoing focus on the Performance Improvement Plan initiatives, we expect continued improvement in gross margins and further efficiencies, a positive recovery in our product distribution channel with the benefits of the improved service levels, launch of our new catalogue and enhancements to the website experience.

“We are focused on many self-help opportunities and with the rebranding to ‘One Flowtech’ in Q2 ’24, this unlocks further synergies including cross selling and upselling the combined product and solutions proposition to our customers.”