Coal continues to boost Fenner
DEMAND for coal and an end to customer destocking have helped Fenner put in a “resilient performance” in very challenging economic conditions.
The Hull-based conveyor belt manufacturer reported that underlying pre-tax profits for the year ended August 31 were in line with expectations at £31.1m compared to £32.1m for the year before.
Acquisitions helped Fenner grow its revenue by 14% to £499.4m from £437.8m.
A final dividend of 4.4p per share is being recommended giving a maintained total dividend for the year of 6.6p per share.
Fenner said that conveyor belting revenues increased 24% to £361.8m as a result of robust coal sector demand.
It said recent investment programmes across a network of global business units had led to growth in its coal related businesses.
In Asia Pacific, growth projections exceeded expectations. Completion of a new world-class manufacturing facility in Western Australia is anticipated to further boost Fenner’s global performance.
Despite tough economic conditions Fenner’s advanced engineered products division gave a “noteworthy” performance by achieving an underlying return on sales in excess of 11%.
A strong result was delivered by the group’s technical weaving business, which was made possible by further progress in developments in the medical sector.
Fenner said that although other divisions had suffered from the effects of deteriorating economic conditions including destocking, it was now seeing signs of improvement and enquiry levels were starting to pick up.
European distributors have seen a substantial drop in sales, which has resulted in a similar drop in sales from stock at Dunlop Conveyor Belting, based in Drachten, Netherlands.
It said it is well-placed to take advantage of the upturn following the implementation of cost reduction initiatives and its focus on maintaining service levels.
Colin Cooke, Fenner’s chairman said: “Each of our businesses have restructured costs appropriately to meet demand levels prevalent during the year, however, they have retained the skills and ability to respond to the current volume pick-up.
“We are seeing early but clear signs of underlying improvements in our markets and the benefits of market share gains in a number of areas.”
Fenner is a world leader in the field of reinforced polymer engineering, producing conveyor belting for the mining, power generation and industrial markets and sealing products for the mining, hydraulics and energy industries; and technical textile structures for medical and industrial applications.
Earlier this year it cut 290 jobs as part of plans to save £11m in costs a year.
