City round-up: NWF Group; Flowtech Fluidpower
Nantwich-based food, feed and fuel distributor, NWF Group, said trading in its first quarter, historically its quietest period, has been in line with expectations.
Ahead of its annual general meeting later today, chair, Philip Acton, said: “I am pleased to give shareholders the following update on trading for the first quarter of the financial year which commenced on 1 June 2024.
“Overall trading in the first quarter, which is typically our quietest period of the year, has been in line with the board’s expectations.
“Taking each of the group’s businesses in turn, in Fuels, volumes are slightly lower than the prior year, with margin improved on the prior year and continued strong cost management. The price of Brent crude oil traded between $69 to $87 per barrel over the period. The board continues to pursue acquisition opportunities in the highly fragmented fuels market, in line with our stated strategy.
“The Food business successfully completed the fit-out of the new warehouse at Lymedale in June and is now building up the site’s storage levels in line with investment plan.
“In Feeds, volumes were slightly higher than the prior year following the wet weather in the spring and early summer whilst margins have been stable. The milk price has been stable during the period.
“With the seasonally busier winter months to come, which are the most material to the group’s performance, the board’s outlook for the financial year as a whole is unchanged. We remain confident in the group’s prospects and continue to target development opportunities supported by our strong balance sheet.”
He said the group will provide a further trading update in December 2024, following the end of its half-year on November 30.
He also thanked NWF’s stakeholders for their support during his time as chair, ahead of handing over to Amanda Burton. He said: “I wish Amanda all the best in leading the continued development of the group.”
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Flowtech Fluidpower’s Skelmersdale base
Revenue and profit dipped at Flowtech Fluidpower in the first half of the year.
Revenues of £55.7m were a reduction of 5.7% in H1 24 compared to last year’s £59.1m with persistent market headwinds leading to reductions across all three geographical segments.
The company said it is pleased with the acquisition of Thorite and “confident that it will pay for itself and deliver accretive revenues and margins into 2025.”
However, in 2024 there will be a negative operating profit impact term on results whilst actions are taken to right size the cost base, improve gross margins and make necessary investments to generate improved revenues and operational stability.
Chief executive Mike England said: “Whilst there are ongoing challenging market conditions, we have delivered further performance improvements, implemented cost control measures and improved overall service levels, which have improved gross margin in the period. However, our market has deteriorated further, and we have, accordingly, significantly reduced our expectations for the full year outturn.”
Analysts Panmure Liberum said Flowtech’s performance was in line with their expectations and recommend investors BUY their shares.
“We set outer year forecasts cautiously, but maintain our view that management’s mid-teens EBITDA target is achievable in the medium term. We see any weakness in the shares as an opportunity to Buy.”
