REG - Flowtech Fluidpower - FY2021 Results & publication of the Annual Report

Flowtech FluidpowerAnnouncement

29/03/2022 07:00

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RNS Number : 3221G  Flowtech Fluidpower PLC  29 March 2022

 

 NEWS RELEASE

 Issued on behalf of Flowtech Fluidpower plc

 Immediate Release

 Tuesday 29 March 2022

 

 

FLOWTECH FLUIDPOWER PLC

("Flowtech", the "Group" or "the Company")

 

A Vital Partner in the Fluid Power Supply Chain

Flowtech Fluidpower is a Group of specialist fluid power businesses. Working
in partnership with customers and suppliers, we deliver essential components,
custom solutions and high-quality servicing support to keep global industry
moving

 

FY2021 RESULTS

PUBLICATION OF THE 2021 ANNUAL REPORT

 

 

 FY2021 Financial & Operational Highlights

 
 ·      As anticipated 2021 was a year in which the business recovered
 strongly from the impact of the COVID-19 pandemic
 ·      Revenue was 15% up on 2020 but remained marginally below levels
 achieved in 2018 and 2019
 ·      Underlying operating profit (*) of £5.7m (2020: £1.1m)
 ·      Operating profit of £3.7m was £5.1m in excess of 2020, however,
 remains below that achieved in 2019 (£5.7m).
 ·      The benefits of cost base restructuring activities undertaken over
 the last two years limited the impact of inflationary and supply chain related
 pressures
 ·      Investment in inventory levels (£8.5m increase)  to ensure we
 managed the availability of our   core products
 ·    Strong progress was made with our plans to develop our e-business
 platform and we  successfully aggregated the Flowtech businesses at the start
 of 2022
 ·     2022 expected to be the year in which the business demonstrates a
 full recovery and delivers growth compared to pre COVID-19. Encouraging start
 to the year, with revenue and gross margin ahead of expectations

 

(*) Underlying operating profit is used as an alternative performance measure
by management to assess the trading performance of the business and is
operating profit before amortisation and impairment of acquired intangibles
and share based payment, and restructuring costs.

 

"I would like to thank all my colleagues across the Group for all their
efforts during the COVID-19 pandemic; it is a great credit to them that
despite the obvious difficulties in managing a multi-site organisation across
four countries, the Group exits the pandemic having made significant progress
against its strategic goals"

 

"By the end of the year we believe that most of the key components of our
strategic plan will be in place with the business benefiting from solid
foundations enabling us to move forward aggressively to unlock our undoubted
growth potential in both offline and, increasingly, online markets"

Roger McDowell, Chair

 

2021 Annual report

The majority of Shareholders now elect to receive key information in an
electronic format. Given the availability of other information via our
website, we have chosen to limit the number of graphics within the document,
enabling us to release the full document in real time via the Regulatory News
Service and upload to the website. We believe this approach is more efficient,
cost effective and environmentally friendly.

 

To view and download the Report please follow this link

 

http://www.rns-pdf.londonstockexchange.com/rns/3221G_1-2022-3-29.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3221G_1-2022-3-29.pdf)

 

Presentation webcast via the Investor Meet Company Platform

The Company is holding a 'live' presentation which will be hosted by CEO Bryce
Brooks, and CFO Russell Cash via the Investor Meet Company platform today at
9.00am. To register please follow this link

https://www.investormeetcompany.com/flowtech-fluidpower-plc/register-investor
(https://www.investormeetcompany.com/flowtech-fluidpower-plc/register-investor)

 

Investors who already follow Flowtech Fluidpower plc on the IMC platform will
automatically be able to join the event.

Extracts from the 2021 Annual Report

To read statements and reports in full, please follow the pdf link on page 1
of this announcement or, visit the Company's website at
https://www.flowtechfluidpower.com/ (https://www.flowtechfluidpower.com/)

 

FY2021 financial highlights

 

                                             2021      2020      2019      Change
                                                                           2021 v 2020  2021 v 2019
 Group revenue (±)                           £109.1m   £95.1m    £112.4m   14.7%        -2.9%
 Gross profit (±)                            £38.5m    £32.6m    £40.2m    18.1%        -4.2%
 Gross profit %                              35.3%     34.3%     35.7%     100bps       -42bps
 Group operating profit / (loss)             £3.7m     £(1.4)m   £5.7m     £5.1m        £(2.0)m
 Group underlying operating profit / (loss)  £5.7m     £1.1m     £9.6m     £4.6m        £(3.9)m
 Net Debt (**)                               £15.4m    £11.6m    £16.6m    £3.8m        £(1.2)m

(±)All results relate to continuing operations

** Net debt at 31 December 2020 comprised £10.7m Bank Debt and £0.9m of
COVID-19 related HMRC support.  All figures exclude lease liabilities under
IFRS16

 

Results by Division

 

 2021                                              Flowtech  Solutions  Services  Total

 £000
 Total revenue                                     52,135    39,575     17,397    109,107
 Underlying segment operating profit (*)           7,101     3,505      140       10,746
 Contribution %                                    13.6%     8.9%       0.8%      9.8%

 2020 (£000)
 Total revenue                                     46,060    33,578     15,443    95,081
 Underlying segment operating profit / (loss) (*)  5,038     1,790      (1,236)   5,592
 Contribution %                                    10.9%     5.3%       -8.0%     5.9%

(*) Underlying Segment operating profit is continuing operations' operating
profit before central costs and separately disclosed items detailed in note 3
of the Annual Report

 

Basis of Preparation

The financial information contained within this Announcement has been prepared
on a going concern basis in accordance with UK adopted international
accounting standards.

 

The financial information has been prepared using accounting policies
consistent with those set out in the 2021 Annual Report refer to the link
attached in the RNS.

 

The financial information set out within this Preliminary Announcement does
not constitute the Company's statutory accounts for the years ended 31
December 2021 or 31 December 2020 within the meaning of Section 434 of the
Companies Act 2006, but is derived from those accounts.

 

Statutory accounts for 2020 have been delivered to the Registrar of Companies,
and those for 2021 are available via the link included above.  The auditor
has reported on those accounts; the reports were unqualified and did not
contain a statement under Section 498(2) or (3) of the Companies Act 2006.

 

To read the financial statements in full, please refer to pages 66-107 in the
Annual Report

 

Dividend

As already stated, our ambition to return to dividend payments, albeit at
levels commensurate with the needs of the business. I The Board will be
recommending a dividend of 2p per ordinary share in respect of 2021 at the
Annual General Meeting on  1 June 2022, Subject to Shareholder approval, the
dividend will be paid on 22 July 2022 to Members on the Register as at 1 July
2022. Moving forward we will maintain a balanced approach to dividend
distribution.

 

Outlook

We entered 2021 with significant work to do and, despite the array of
challenges, it is pleasing to report that much has been achieved. For 2022, we
have clear prioritised actions, notably exploiting our new digital capability,
creating the Fluidpower Group to sit alongside the now aggregated Flowtech
business and, re-focusing on improving all our important KPIs. The start to
the year has been encouraging, with revenue and gross margin ahead of
expectations.

 

By the end of the year we believe that most of the key components of our
strategic plan will be in place with the business benefiting from solid
foundations enabling us to move forward aggressively to unlock our undoubted
growth potential in both offline and, increasingly, online markets. The Board
therefore believes that the outlook for the business remains positive over
both the near and long-term.

 

 To read more about
 ·      our strategy for growth - see page15        ·      Corporate social responsibility - Section 172 statement - see
                                                    page 28
 ·      our KPIs - see page 16                      ·      The Board - see pages 38-40
 ·      Sustainability report - see page 21         ·      Independent Auditor's report - seepages 55-65

 

The full index of content for the 2021 Annual Report can be found on page 3 of
the Annual Report

 

 

 ENQUIRIES:
 Flowtech Fluidpower plc

 Bryce Brooks, Chief Executive

 Russell Cash, Chief Financial Officer

 Tel: +44 (0) 1695 52759

 Email: info@flowtechfluidpower.com (mailto:info@flowtechfluidpower.com)

 www.flowtechfluidpower.com (http://www.flowtechfluidpower.com)

 Liberum (Nominated adviser and Sole Broker)

 Richard Lindley / Ben Cryer / William Hall / Will King

 Tel: +44 (0) 20 3100 2000

 TooleyStreet Communications (IR and media relations)

 Fiona Tooley

 Tel: +44 (0) 7785 703523

 or email: fiona@tooleystreet.com (mailto:fiona@tooleystreet.com)

 

 

 About Flowtech Fluidpower plc

 Founded as Flowtech in 1983, the Flowtech Fluidpower Group is a group of
 specialist fluid power businesses.  Working in partnership with customers and
 suppliers, we deliver essential components, customer solutions and
 high-quality servicing support to keep global industry moving.  The business
 joined the AIM market in 2014.  Since the start of 2021, the Group has been
 operating under three distinct branded segments: with Flowtech and Fluidpower
 Group Solutions forming what was 'Components', and Fluidpower Group Services
 the remainder. To read more about the Group please visit
 www.flowtechfluidpower.com (http://www.flowtechfluidpower.com) .

 Segment:          What we do:                                                                      Locations:
 Flowtech          Supply of both hydraulic and pneumatic consumables, predominantly through        Flowtechnology Benelux (Deventer)

                 distribution for maintenance and repair operations across all industry markets

                   and supported by supply agreements direct to a broad range of original           Flowtech - Skelmersdale, Leicester & Oldbury
                   equipment manufacturers.

 

                   Channels to market:

                   E-commerce websites, customer white label e-commerce websites, catalogues, own
                   and customer trade counters.

 Fluidpower        Supply specialist technical hydraulic components & systems predominantly         Primary Fluid Power Components (Skelmersdale)

                 into OEMs and end-user channels to all industry markets and supported by

 Group Solutions   supply agreements direct to a broad range of manufacturer brands.                Nelson Hi-Power Hydraulics (Dublin, Dungannon, UK)

                                                                                                    HTL (Ludlow)

                   Channels to market:                                                              Hi-Power Hydraulics (Cork, Dublin, Belfast )

                   Engineering collaboration, e-commerce.                                           Hydroflex (Brussels, Rotterdam and OudBeijerland)

                                                                                                    Hydraulic Equipment Supermarkets (Gloucester, Leeds)

                                                                                                    Derek Lane & Co (Newton Abbot, Devon)

                                                                                                    HES Tractec (Gloucester)

 Fluidpower        Bespoke design, manufacturing, commissioning, installation, and servicing of     Primary Fluid Power Systems (Knowsley)

                 systems to manufacturers of specialised industrial and mobile hydraulic OEMs

 Group Services    and additionally a wide range of industrial end users.  Capital project-based    Branch Hydraulic Systems and HES Automatec (Gloucester)

                 revenue.

                                                                                HES Lubemec (Gloucester)

                                                                                HES Onsite (Leeds, Gloucester)
                   Channels to market:

                                                                                Flow Connect (Gloucester)
                   In-house design and build, combined with on-site installation, servicing and

                   support.                                                                         Orange County (Spennymoor)

 All the Group's divisions have overlapping product sets, allowing procurement
 synergies to be maximised.  The above segments are supported by a centralised
 back-office team based in Wilmslow, Cheshire.  In total, the business
 employed 612 people during the year. For more information please visit,  Our
 business | Flowtech Fluidpower plc
 (https://www.flowtechfluidpower.com/our-business/)

 

Flowtech Fluidpower plc

Registered Office,

Bollin House,

Bollin Walk

Wilmslow, Cheshire, SK9 1DP

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