Challenges in US and Australia to hit Fenner profits

INDUSTRIAL group Fenner today warned of a drop in pre-tax profits as it said US trading conditions and cautious sentiment in the coal industry have deteriorated and show no prospect of improvement.

The Hessle-based conveyor belt and reinforced polymer manufacturer said its Engineered Conveyor Solutions (ECS) division is therefore expected to see significantly weaker results in the USA than previously anticipated for the remainder of the financial year.

In Australia, while trading conditions generally continue to improve reflecting elevated levels of mineral extraction activity, Fenner said ECS had been  unsuccessful in a competitive tender for the supply of conveyor belt to an iron ore miner in western Australia, which it had previously expected to manufacture and deliver during the final quarter of the financial year.

“The combined effect of these factors could be to reduce the group’s underlying profit before tax by 10-15% relative to the prevailing market consensus forecast of £77.6m,” the group said.

“However, the performance and outlook for the Advanced Engineered Products division for the remainder of the financial year and beyond is unchanged and remains encouraging.”