Coal boosts Fenner but profits are down

FENNER, the Hessle near Hull-based conveyor belt manufacturer, said that its coal related business was continuing to perform well following an “encouraging start” to the calendar year.

The division, which represents the majority of the firm’s conveyor belting business, is currently its strongest performer.

Fenner’s process seal business, which serves the oil and gas sector, has performed satisfactorily over the past financial year while technical weaving activities have made a good contribution to first half profits.

However, the firm added in its pre-close trading update that industrial businesses representing the majority of advanced engineered products and about one third of conveyor belting had seen a continuation of the economic downturn exacerbated by customer de-stocking.

As a result like-for-like industrial volumes in the first half were around 16% down on the same period last year.

Fenner said however that there were “very early signs” that customer de-stocking was coming to an end and that volumes were stabilising – albeit at a level well below last year.

“Our first half is a typically weaker trading period and overall, notwithstanding the industrial markets, we expect to report an underlying operating profit for the first half approximately 10% below the same period last year,” it continued.

The group also continues to struggle with currency fluctuation, with the devaluation of sterling, particularly against the US dollar, adding around £40m to net debt, which as of February increased to £190m.

Earlier this year, the group announced that it was to make 290 staff redundant as part of plans to save an annual £11m in costs.

Fenner’s chief executive Mark Abrahams said it was taking the action because of the impact of the “deteriorating wider economic conditions” on some of its markets.

Fenner will announce its interim results on April 29.