Losses plummet to £30m at Fenner after major restructure

POLYMER products business Fenner has said that full year results are ahead of expectations despite revenues dropping and losses increasing substantially.

For the year to 31 August 2016, revenues declined to £572.5m from £666.7m the year before.

Loss before tax at the company which manufactures belting for the mining industry widened to £30.3m from £5.3m in the same period last year.

It said it has been affected by adverse fluctuations in the US mining industry and worldwide oil and gas industry.

Restructuring costs have also hit the firm hard, costing £15.8m, the majority of which was in relation to Engineered Conveyor Solution division’s North American business.

This leaves it with a “substantially reduced cost base” and Fenner bosses are predicting that the current year will be modestly ahead of its previous expectations.

The firm is also on the hunt for a chief executive and a chairman, with current CEO Mark Abrahams staying in the role past his initial retirement in February 2017 until a replacement is made.

Mark Abrahams, chief executive officer, commented: “The Group has made important progress in repositioning those businesses which have been most affected by market conditions.

“Taken as a whole, the Group has commenced the new financial year with a substantially reduced cost base and with several of the leading indicators for the Group’s businesses showing a more positive trend.

“As a consequence, we now anticipate that the outcome for the current year will be modestly ahead of our previous expectations. In addition, the Group is experiencing a tailwind from the translation of overseas earnings into sterling, with the year-on-year impact on underlying operating profit from currency movements estimated to be £4m based on exchange rates prevailing during the early part of the new financial year.”