REG - Flowtech Fluidpower - Half-Year Report - six months ended 30 June 2025
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RNS Number : 4937Y Flowtech Fluidpower PLC 09 September 2025
NEWS RELEASE
Issued on behalf of Flowtech Fluidpower plc
Tuesday, 9 September 2025
FLOWTECH FLUIDPOWER PLC
("Flowtech", the "Group" or "Company")
"a world of motion"
Everything we do at Flowtech is focused on keeping business moving, whether
that is supplying a product or designing and building a complex engineering
solution. Our vision is to be the trusted advisor in a world of motion.
2025 HALF-YEAR REPORT
For the six months ended 30 June 2025
"The Group delivered a performance for H1 25 in line with the Board's
expectations with further improvements in gross margins and continued focus on
cost control and overall customer service levels. Combined, the positive
impact of these initiatives has served to offset ongoing challenging
industrial market headwinds which have impacted top line growth, in particular
through March and April. Momentum has improved during Q2 25 and into Q3 25
with self-help growth initiatives strengthening the sales pipeline and
orderbook. This momentum in our top line, combined with improved gross
margin and lower cost base, underpins the Boards confidence that H2 25 will be
a period in which we see higher levels of profitability and strong cash
generation. As such, the Group's performance is in line with the Board's
full year expectations."
Mike England, Chief Executive Officer
SUMMARY HEADLINES
· Group revenue increased by 2.1% compared with H1 24 and 10.3%
compared with H2 24.
o On a like-for-like basis, revenue reduced by 11.8% compared with H1 24
reflecting tougher market conditions.
o H1 25 delivered revenue growth of 5% on a like for like basis against H2
24, highlighting more positive momentum gains in the period which further
strengthened in Q2 25.
o Compared with H2 24, positive growth seen in all three Regional segments,
with GB +11%, Island of Ireland +5.9% and Benelux +14.8%, demonstrating
improved top line momentum resulting from the self-help growth initiatives.
o The sales order book is more than 25% higher at the end of H1 25 compared
to the start of 2025.
· Gross profit margin up 100bps to 39.2% against FY 24 as a result
of self-help gross margin improvement initiatives.
· Tight cost control with underlying operating overheads £0.5m
lower than H1 24 excluding costs associated with acquired businesses.
· Underlying EBITDA of £3.5m, £1.2m below a strong comparator in
H1 24 and £2.3m more than H2 24 demonstrating improving momentum and drop
through.
· All three acquisitions (Thorite, Allswage and Thomas) making a
positive contribution with further gains expected in H2 25.
· £5.6m (15%) like for like reduction in working capital compared
to end H1 24.
· Pre IFRS 16 net debt was £18.5m at end H1 25 (H1 24: £13.5m),
providing headroom of £6.5m in the Group's £25m banking facilities.
Current trading and outlook
· Continued focus on self-help growth initiatives and further
improvements to customer service levels, has led to a strengthening sales
pipeline and order book. The order book has improved 25% compared to January
2025, including securing a number of new, higher value contracts.
· The carefully managed transition to the new website from July has
progressed as planned with most customers already onboarded to the new site by
the end of August. We expect to see improved momentum in this channel into
Q4 25 and beyond.
· Despite the expectation of continuing challenging and volatile
industrial markets, this momentum in our top line, combined with improved
gross margin and lower cost base, underpins the Board's confidence that H2 25
will be a period in which we see higher levels of profitability and strong
cash generation.
· We remain confident that the Performance Improvement Plan and
Strategy for Growth (including the e-commerce upgrade) will continue to
deliver progress and build towards our mid-term mid teen EBITDA goals.
FINANCIAL HIGHLIGHTS
Half year ended Half year ended Year ended
30 June 2025 30 June 2024 31 December 2024
Unaudited Unaudited Audited
· Revenue £56.9m £55.7m £107.3m
· Gross profit £22.3m £21.4m £41.0m
· Gross profit % 39.2% 38.4% 38.2%
· Underlying EBITDA* £3.5m £4.7m £5.9m
· Underlying operating profit** £1.6m £2.9m £2.7m
· Operating profit / (loss) £0.8m £1.2m (£25.2m)
· Profit / (loss) before tax £0.1m £0.3m (£27.1m)
· Earnings per share (basic) (0.23p) 0.41p (42.23p)
· Net debt*** £18.5m £13.5m £15.1m
*Underlying EBITDA is profit before interest, taxation, depreciation and
separately disclosed items
**Underlying operating profit is operating profit for continuing operations
before separately disclosed items (note 3)
***Net debt is bank debt less cash and cash equivalents. It excludes lease
liabilities under IFRS 16
2025 HALF-YEAR FINANCIAL PERFORMANCE AND DIVISIONAL ANALYSIS
Revenue by current segment Six months Six months % Six months % Year
ended ended Change ended Change ended
30 June 2025 31 December 2024 30 June 2024 31 December 2024
£000 £000 £000
£000
Great Britain 41,738 37,597 11.0% 38,316 8.9% 75,913
Island of Ireland 10,152 9,584 5.9% 11,786 -13.9% 21,370
Benelux 5,007 4,389 14.8% 5,610 -10.8% 9,999
Total Group revenue 56,897 51.570 10.3% 55,712 2.1% 107,282
Gross profit % 39.2% 38.0% 38.4% 38.2%
Underlying segment operating profit Six months Return on revenue Six months Return on revenue Six months Return on revenue % Year Return on revenue %
ended % ended % ended ended
30 June 2025 31 December 2024 30 June 2024 31 December 2024
£000 (restated) £000
£000
£000
Great Britain 3,073 7.4% 2,052 5.5% 3,754 9.8% 5,806 7.7%
Island of Ireland 1,192 11.7% 825 8.6% 1,696 14.4% 2,521 11.8%
Benelux 333 6.6% (214) (4.9%) 577 10.3% 363 3.6%
Central costs (3,031) (2,892) (3,148) (6,040)
Underlying operating profit* 1,567 (229) 2,879 2,650
REVENUE
Group revenue increased by 2.1% compared with H1 24. On a like-for-like basis,
removing the contribution from acquisitions, revenue reduced by 11.8% compared
with H1 24, with similar levels of decline in each of our three geographical
segments. We have outperformed wider industry trends in the period and H1 25
delivered revenue growth of 5% on a like for like basis against H2 24,
highlighting more positive momentum gains in the period with June representing
the strongest month of revenue, gross margin, and EBITDA contribution for over
12 months. Compared with H2 24, we saw positive growth in all three Regional
segments, with GB +11%, Island of Ireland +5.9% and Benelux +14.8%,
demonstrating improved top line momentum of the self-help growth initiatives.
As a result of our pro-active Strategy for Growth plan, and despite the
challenging market backdrop, our sales pipeline and order book continue to
strengthen which provides a foundation for a stronger H2 25 performance. The
sales order book is more than 25% at the half year than at the start of 2025.
Gross profit margin
Gross profit margin increased by 100bps to 39.2% compared with FY 24, building
on the progress made in recent years. The H1 25 gross profit excluding the
impact of acquisitions was 125bps more than H1 24 and 97bps up on H2 24,
demonstrating the continued progress in this area.
UNDERLYING OPERATING OVERHEADS
Underlying operating overheads totalled £20.8m in H1 25, £2.3m up on H1 24.
Excluding the impact of acquisitions, the H1 25 figure is £18.1m, an
underlying reduction of £0.5m offsetting modest pay increases, the impact of
employer national insurance and general inflationary pressures. Tight cost
control has remained a focus and, as part of this, management actions include
rightsizing FTE headcount in addition to attracting new talent in key areas to
support our growth plan.
UNDERLYING OPERATING PROFIT
Underlying operating profit in H1 25 of £1.6m compares with £2.9m in H1 24
and a loss of £0.2m in H2 24. The £1.3m reduction compared with H1 24
primarily reflects the reduction in like-for-like revenue, with a £2.0m
impact, which was mitigated by a combination of further improvements to gross
margin, focus on all areas of cost reduction and modest contributions from the
recently acquired businesses.
NET DEBT
Pre IFRS 16 net debt was £18.5m at 30 June 2025 (H1 24: £13.5m), leaving
headroom of £6.5m in the Group's £25.0m banking facilities. The increase in
debt over the 12-month period to June 2025 in part reflects the selective
capital investment to support growth (£3.9m), costs associated with
acquisitions (£1.7m) and the dividend paid (£1.4m) in H2 24. There has been
a £5.6m reduction in working capital related to non-acquired businesses over
the same period.
It is expected that improved levels of profitability combined with continued
careful control over capital projects, costs and working capital, will lead to
stronger cash generation in the second half of the year and beyond. Whilst we
will make further investment in our e-commerce and technology platforms to
drive customer service improvements and greater operational efficiency, spend
will be materially lower than that incurred over recent years as we move into
a maintenance/continuous improvement phase. The Board previously took the
decision not to pay a dividend in 2025.
TRADING REVIEW
The Group continued to make progress in H1 25 despite challenging market
conditions with our focus firmly on executing our Performance Improvement
Plan, supported by selective M&A.
Well documented market headwinds have persisted during the first half. As a
result, end customers are continuing to be prudent on expenditure, holding
lower inventory levels, and delaying projects. However, in June, there were
small signs of markets beginning to stabilise supported by improved economic
indicators and corresponding market confidence across our three regions.
The Group sustained its focus on a number of defined self-help initiatives to
deliver improved sales growth, gross margin and cost management, and described
further below:
Self-help areas of sales growth
Four areas of concentrated effort delivered improved customer service and
positive forward momentum with the sales pipeline and order book being at the
highest level in recent times.
a) New digital platform
We have transformed our digital infrastructure presence with the new Flowtech
website and e-commerce platforms being introduced to the market in
the UK in July, with good initial uptake from our client base. A further roll
out of the platform into our Ireland and Benelux markets is expected during
H2 25. This exciting initiative will enhance digital growth, customer reach
and efficiency which we will build upon as we move into 2026 and beyond.
Our vision for Flowtech is to be the leading specialist in digitally enabled
product and engineering Solutions across hydraulics, pneumatics, and process -
www.flowtech.co.uk (http://www.flowtech.co.uk/)
b) Brand & product range expansion
A key part of our growth strategy is to expand our product and service
offering to increase our customer penetration and reach. During H1 25, we
have
secured new, incremental strategic supplier agreements which will contribute
to H2 25 growth and beyond. We have strengthened existing strategic
supplier relationships and implemented more robust mid-term growth plans
aligned to our refreshed go-to-market approach and proposition. In a
difficult market, our own brand range is performing relatively well compared
to the base business.
c) New Engineering Project Wins
Sales focus on targeted industry sectors including areas of Government
investment, with examples including infrastructure, aerospace, defence and
transportation, has led to improved momentum towards the end of the second
quarter, resulting in a strengthened sales pipeline and forward order
book for H2 25 and beyond. This includes two bridge projects with combined
contract value totalling €9m over the next 24 months.
d) Inorganic Growth
We have made good progress with each of the recently acquired businesses, now
generating positive contributions. Thorite is now well integrated 12 months
following acquisition, with progress being made with both Allswage and Thomas
Group, the H1 25 acquisitions. We are confident that these three
Businesses combined, which currently deliver annualised revenue of
approximately £18m, will be an important component of driving our future
organic
growth and earnings. As a reminder, all three were purchased out of
distressed situations meaning consideration was minimal.
Self-help in areas of gross margin and cost management
Management focus has been on improving commercial excellence in gross margin
management and in identifying and executing efficiency and cost reduction
initiatives as part of the plan. This has resulted in a further 100bps
increase in gross margins against FY 24 and the careful management of the cost
base, in particular people related costs, has reduced like for like overheads
by £0.5m despite impact of modest pay increase, employer insurance
contribution and general inflation.
ESG Strategy Progression and Health & Safety Focus
We continue to make strong and measurable progress in delivering our ESG
strategy. Health and Safety performance remains robust, with expanded site
representation now inclusive of all newly acquired locations. The integration
of Health & Safety with Major Projects has created valuable synergies,
enhanced operational efficiency and strengthened client collaboration.
To further elevate our standards, we have upgraded our external consultancy
support, ensuring expert guidance across all areas. Looking ahead, health
remains our strategic focus for 2025. We have launched a comprehensive
Wellbeing Strategy, supported by a cross-functional Wellbeing Committee. Key
priorities include mental health, charitable engagement, and the rollout of an
enhanced Employee Assistance Programme, offering 24/7 access to GP services.
We are proud to have achieved Safe Contractor and Constructionline Gold
accreditations, reinforcing our commitment to excellence. Capability
development remains a core priority, with 100% of our Health & Safety
representatives scheduled for IOSH training. Our continued membership in the
5% Club reflects our dedication to investing in early careers and long-term
workforce development.
All targets set for environmental and sustainability activity plans are on
track.
OUTLOOK
Continued focus on self-help growth initiatives and further improvements to
customer service levels has led to a strengthening sales pipeline and order
book which has improved 25% compared to January 2025, including securing a
number of new, higher value contracts. Despite the expectation of continuing
challenging and volatile industrial markets, this momentum in our top line,
combined with improved gross margin and lower cost base, underpins the Board's
confidence that H2 25 will be a period in which we see higher levels of
profitability and strong cash generation.
We remain steadfast and focussed on the self-help initiatives of sales growth,
gross margin and cost management to deliver improved growth, operating
leverage, profitability and cash generation in the second half including:
· Capitalising on the investment in the new digital platform,
trading the new Flowtech website and rolling out the platform into Ireland and
Benelux markets.
· Forward momentum from the strong sales pipeline and order book,
entering H2 25 at the highest level in recent times, with new, incremental
larger engineering projects secured, such as the two bridge projects with
combined contract value totalling €9m over the next 24 months.
· Exploiting new, incremental strategic supplier agreements secured
in H1 25, increasing share of wallet with existing customers and improving new
customer acquisition.
· Further value creation and growth momentum from the three,
recently acquired businesses, to deliver annualised revenue of approximately
£18m and continue to identify further inorganic growth opportunities.
As such, the Group continues to trade in line with the Board's expectations
for the full year ending 31 December 2025.
We remain confident that the Performance Improvement Plan and Strategy for
Growth (including the e-commerce upgrade) will continue to deliver progress
and build towards our mid-term mid teen EBITDA goals.
By order of the Board
9 September 2025
Notes
Prior to this announcement consensus market forecast for FY25 was revenue of
£120.2m and adjusted EBITDA of £8.4m
The Company will be holding the following webcast presentations today (9
September 2025). These will be hosted by CEO Mike England and CFO Russell
Cash. To join either or both events, follow the links below:
Platform: UK time Link to register:
commencing at
Investor Meet Company 10.00 hrs https://www.investormeetcompany.com/flowtech-fluidpower-plc/register-investor
(https://www.investormeetcompany.com/flowtech-fluidpower-plc/register-investor)
SparkLive 13.00hrs Flowtech- FY25 - half-year results | SparkLive | LSEG
(https://sparklive.lseg.com/FlowtechFluidPower/events/25caa5af-929f-4ffd-95d7-8c40e6eeb328/flowtech-fy25-half-year-results)
Further information on the recently key projects secured can be read here:
21 May 2025 RNS Reach: Flowtech capitalises on acquisitions opportunities
(https://www.londonstockexchange.com/news-article/FLO/flowtech-capitalises-on-acquisitions-opportunities/17048000)
18 June 2025 RNS Reach: Flowtech wins Waterside City bridge contract
(https://www.flowtechfluidpower.com/results-and-reports/regulatory-news/rns-item/?rid=7717114) (https://www.londonstockexchange.com/news-article/FLO/flowtech-wins-waterside-city-bridge-contract/17091928)
22 July 2025 RNS Reach: New Contract wins & Partnerships
(https://www.londonstockexchange.com/news-article/FLO/new-contract-wins-partnerships/17144983)
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2025
Notes Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Continuing operations
Revenue 56,895 55,712 107,282
Cost of sales (34,577) (34,301) (66,267)
Gross profit 22,318 21,411 41,015
Distribution expenses (2,188) (2,188) (4,169)
Administrative expenses before separately disclosed items: (18,564) (16,344) (34,196)
- separately disclosed items (765) (1,663) (27,888)
Total administrative expenses (19,329) (18,007) (62,084)
Operating profit / (loss) 801 1,216 (25,238)
Financial expenses (880) (878) (1,839)
Profit / (loss) from continuing operations before tax (79) 338 (27,077)
Taxation 4 (67) (87) 671
Profit / (loss) from continuing operations (146) 251 (26,406)
Earnings per share 5
Basic earnings per share - continuing operations (0.23p) 0.41p (42.23p)
Diluted earnings per share - continuing operations (0.23p) 0.41p (42.23p)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2025
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Profit / (loss) for the period (146) 251 (26,406)
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
-Exchange differences on translating foreign operations 283 (158) (359)
Total comprehensive income in the period 137 93 (26,765)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2025
Unaudited Unaudited Audited
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Assets
Non-current assets
Goodwill 14,996 40,066 14,996
Other intangible assets 4,608 2,644 3,776
Right of use assets 7,040 4,307 4,806
Property, plant, and equipment 7,743 7,848 7,546
Total non-current assets 34,387 54,865 31,124
Current assets
Inventories 28,388 27,948 29,263
Trade and other receivables 25,597 24,260 22,740
Prepayments 2,476 1,653 1,052
Cash and cash equivalents 422 6,367 1,839
Total current assets 56,883 60,228 54,894
Liabilities
Current liabilities
Interest bearing borrowings - - -
Lease liability 1,467 1,568 1,694
Trade and other payables 21,713 18,378 20,866
Tax Payable 19 720 228
Total current liabilities 23.199 20,666 22,788
Net current assets 33,684 39,562 32,106
Non-current liabilities
Interest-bearing borrowings 18,958 19,883 16,913
Lease liability 6,163 3,436 3,743
Provisions 176 361 179
Deferred tax liabilities 735 1,422 791
Total non-current liabilities 26,032 25,102 21,626
Net assets 42,039 69,325 41,604
Equity directly attributable to owners of the parent
Share capital 31,637 31,637 31,637
Share premium 61,662 61,662 61,662
Other reserves 187 187 187
Shares owned by the Employee Benefit Trust (EBT) (54) (124) (54)
Merger reserve 293 293 293
Merger relief reserve 3,646 3,646 3,646
Currency translation reserve (88) (135) (336)
Retained losses (55,244) (27,841) (55,431)
Total equity attributable to the owners of the parent company 42,039 69,325 41,604
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2025
Share capital Share Other reserves Shares owned by EBT Merger reserve Merger Currency Retained Total
premium £000 relief translation losses equity
£000 £000 £000 reserve reserve
£000 £000 £000 £000 £000
Six months ended
30 June 2025
Unaudited
Balance at 1 January 2025 31,637 61,662 187 (54) 293 3,646 (336) (55,431) 41,604
Profit for the period - - - - - - - (146) (146)
Other comprehensive income - - - - - - 248 35 283
Total comprehensive income for the year 137
- - - - - - 248 (111)
Transaction with owners
Issue of share capital - - - - - - - - -
Share options settled - - - - - - - - -
Share-based payment charge - - - - - - - 298 298
Balance at 30 June 2025 31,637 61,662 187 (54) 293 3,646 (88) (55,244) 42,039
Six months ended
30 June 2024
unaudited
Balance at 1 January 2024 30,746 60,959 187 (124) 293 3,646 23 (28,331) 67,399
Profit for the period - - - - - - - 251 251
Other comprehensive income - - - - - - (158) - (158)
Total comprehensive income for the year
- - - - - - (158) 251 93
Transaction with owners
Issue of share capital 891 703 - (200) - - - - 1,394
Share-based payment charge - - - 200 - - - (71) 129
Share options settled - - - - - - - 310 310
Balance at 30 June 2024 31,637 61,662 187 (124) 293 3,646 (135) (27,841) 69,325
Twelve months ended
31 December 2024
audited
Balance at 1 January 2024 30,746 60,959 187 (124) 293 3,646 23 (28,331) 67,399
Profit for the year - - - - - - - (26,406) (26,406)
Other comprehensive income - - - - - - (359) - (359)
Total comprehensive income for the year
- - - - - - (359) (26,406) (26,775)
Transaction with owners:
Issue of share capital 891 703 - (200) - - - - 1,394
Share-based payment charge - - - - - - - 730 730
Dividends paid - - - - - - - (1,383) (1,383)
Share options settled - - - 270 - - - (41) 229
Total transactions with owners 891 703 - 70 - - - (695) 969
Balance at 31 December 2024 31,637 61,662 187 (54) 293 3,646 (336) (55,431) 41,604
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2025
Note Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Net cash from operating activities 6 888 2,799 8,706
Cash flow from investing activities
Payment for acquisition (306) (832)
Repayment of Credit facility from acquisition (200) - (1,694)
Acquisition of property, plant, and equipment (694) (822) (1,547)
Acquisition of intangible assets (1,264) (633) (1,764)
Proceeds from sale of property, plant, and equipment 9 20 31
Net cash used in investing activities (2,455) (1,435) (5,806)
Cash flows from financing activities
Net proceeds from issue of share capital - 1,393 1,393
Repayment of lease liabilities (978) (854) (1,663)
Drawdown / (Repayment) of bank loan 2,000 (3,000)
Interest on lease liabilities (146) (117) (225)
Other interest (748) (792) (1,616)
Proceeds from sale of shares held by EBT - 200 270
Dividends paid - - (1,383)
Net cash generated from / (used in) financing activities 128 (170) (6,225)
Net change in cash and cash equivalents (1,439) 1,194 (3,225)
Cash and cash equivalents at start of period 1,839 5,184 5,184
Exchange differences on cash and cash equivalents 22 (11) (20)
Cash and cash equivalents at end of period 422 6,367 1,839
Short-term borrowings Long-term borrowings Lease liabilities Total
£000 £000 £000 £000
At 1 January 2025 - 16,913 5,437 22,350
Cash flows
Repayment - - (1,123) (1,123)
Movement between short-term and long-term - - - -
Addition 2000 3,160 5,160
Other movements - 45 146 191
Non-cash
Foreign exchange - - 10 10
At 30 June 2025 - 18,958 7,610 26,568
NOTES TO THE HALF-YEAR REPORT
For the six months ended 30 June 2025
1. General information
The principal activity of Flowtech Fluidpower plc (the "Company") and its
subsidiaries (together, the "Group") is the distribution of engineering
components and assemblies, concentrating on the fluid power industry. The
Company is a public limited company incorporated and domiciled in the United
Kingdom. The address of its registered office is Bollin House, Wilmslow, SK9
1DP.
The registered number is 09010518.
As permitted, this Half-year report has been prepared in accordance with the
AIM rules and not in accordance with IAS 34 "Interim Financial Reporting".
The consolidated financial statements are prepared under the historical cost
convention, as modified by the revaluation of certain financial instruments.
This consolidated Half-year report and the financial information for the six
months ended 30 June 2024 does not constitute full statutory accounts within
the meaning of section 434 of the Companies Act 2006 and are unaudited. This
unaudited Half-Year Report was approved by the Board of Directors on 27
September 2024.
The Group's financial statements for the year ended 31 December 2023 have been
filed with the Registrar of Companies. The Group's auditor's report on these
financial statements was unqualified and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
Electronic communications
The Company does not intend to bulk print and distribute hard copies of this
Half-year report, although copies can be requested by contacting: The Company
Secretary, Flowtech Fluidpower plc, Bollin House, Bollin Walk, Wilmslow, SK9
1DP. Email: investorrelations@flowtech.co.uk
(mailto:investorrelations@flowtech.co.uk) .
The Board believes that by utilising electronic communication it delivers
savings to the Company in terms of administration, printing and postage, and
environmental benefits through reduced consumption of paper and inks, as well
as speeding up the provision of information to shareholders. News updates,
regulatory news, and financial statements can be viewed and downloaded from
the Group's website: www.flowtech.co.uk (http://www.flowtech.co.uk/) .
2. aCCOUNTING POLICIES
2.1 Basis of preparation
The financial information set out in this consolidated Half-year report has
been prepared under International Accounting Standards in conformity with the
requirements of the IFRIC interpretations issued by the International
Accounting Standards Board (IASB) and the Companies Act 2006 and in accordance
with the accounting policies which will be adopted in presenting the Group's
Annual Report and Financial Statements for the year ended 31 December 2024.
These are consistent with the accounting policies used in the Financial
Statements for the year ended 31 December 2023.
2.2 Going concern
The financial statements are prepared on a going concern basis. The Directors
believe this to be the most appropriate basis for the following reasons:
· The Group generated underlying operating profit of £1.6m in the
six months ended 30 June 2025.
· The Group is financed by revolving credit facilities totalling
£20m until February 2027 and £5m overdraft facility, repayable on demand.
· The Group has operated, and is expected to continue to operate,
within its Banking facilities.
The Directors have revisited the forecasts and continue to anticipate a
profitable performance in the second half of 2025. Updated cash flow forecasts
continue to show the business operating within the limits of its Banking
facilities.
Naturally, these forecasts include a number of key assumptions relating, inter
alia, to revenue, margins, costs and working capital. In any set of forecasts
there are inherent risks relating to each of these assumptions. As such there
is always a degree of uncertainty; if market conditions were such that it
materially impacted on the ability to generate expected levels of revenue,
without appropriate action, this could lead to pressure on the Group's ability
to operate within its existing banking facilities. Of course, in such a set of
circumstances management would take action to mitigate the impact of this, in
particular by careful management of the Group's cost base and working capital.
Doing so would assist in seeking to ensure all bank covenants were complied
with and the business continued to operate within its aggregate £25m banking
facility. The Group therefore continues to adopt the going concern basis in
preparing its financial statements.
3. OPERATING SEGMENTS
The operations of the business are reviewed based on three geographical
segments - Great Britain, Island of Ireland and Benelux (as explained in note
3 Segment Reporting (page 98) of the Annual report 2023). These geographical
segments are monitored by the Group's Chief Operating Decision Maker and
strategic decisions are made on the basis of adjusted segment operating
results. Inter-segment revenue arises on the sale of goods between Group
undertakings.
Segment information for the reporting periods is as follows:
Half year ended 30 June 2025 Great Britain Island of Benelux Inter-segmental transactions Central Total
Ireland £000 Costs continuing
operations
£000 £000 £000 £000 £000
Income statement - continuing operations:
Revenue from external customers 41,738 10,152 5,007 - - 56,897
Inter segment revenue 2,699 287 933 (3,919) - -
Total revenue 44,437 10,439 5,940 (3,919) - 56,897
Underlying operating result* 3,073 1,192 333 - (3,031) 1,567
Net financing costs (250) (9) (23) - (599) (881)
Underlying segment result 2,823 1,183 310 - (3,630) 686
Separately disclosed items (see below) (118) (4) (229) - (414) (765)
Profit before tax 2,705 1,179 81 - (4,044) (79)
Specific disclosure items
Depreciation on owned plant ,property and equipment 678 50 33 - 1 761
Depreciation on right-of-use assets 682 139 64 - 56 941
Accelerated depreciation of old website 197 - - - - 197
Negative goodwill (646) - - - - (646)
Amortisation 517 - 49 - - 566
Reconciliation of underlying operating result to operating profit:
Underlying operating result* 3,073 1,192 333 - (3,031) 1,567
Separately disclosed items (see below) (118) (4) (229) - (414) (765)
Operating profit/ (loss) 2,955 1,188 104 - (3,445) 801
(*) Underlying operating result is continuing operations' operating profit
before separately disclosed items
The Directors believe that the Underlying Operating Profit provides additional
useful information on underlying trends to Shareholders. The term 'underlying'
is not a defined term under IFRS and may not be comparable with similarly
titled profit measurements reported by other companies. A reconciliation of
the underlying operating result to operating result from continuing operations
is shown below. The principal adjustments made are in respect of the
separately disclosed items as detailed later in this note; the Directors
consider that these should be reported separately as they do not relate to the
performance of the segments.
Half year ended 30 June 2024 Great Britain Island of Ireland Benelux Inter-segmental transactions Central Total
(Restated) £000 Costs continuing
£000 £000 operations
£000 £000 £000
Income statement - continuing operations:
Revenue from external customers 38,316 11,786 5,610 - - 55,712
Inter segment revenue 2,078 226 260 (2564) - -
Total revenue 40,394 12,012 5,819 (2,564) - 55,712
Underlying operating result* 3,754 1,696 577 - (3,148) 2,879
Net financing costs (89) (16) (3) - (770) (878)
Underlying segment result 3,663 1,680 574 - (3,916) 2,001
Separately disclosed items (see below) (516) (66) (49) - (1,032) (1,663)
Profit before tax 3,155 1,614 525 - (4,948) 338
Specific disclosure items
Depreciation on owned plant, property and equipment 634 48 36 - - 718
Depreciation on right-of-use assets 550 178 64 - 73 865
Amortisation 462 59 49 - - 570
Reconciliation of underlying operating result to operating profit:
Underlying operating result* 3,754 1,696 577 - (3,148) 2,879
Separately disclosed items (see below) (516) (66) (49) - (1,032) (1,663)
Operating profit/ (loss) 3,238 1,630 528 - (4,180) 1,216
(*) Underlying operating result is continuing operations' operating profit
before separately disclosed items
For the year ended 31 December 2024 Great Britain Island of Ireland Benelux Inter-segmental transactions Central Total
£000 Costs continuing
£000 operations
£000 £000 £000 £000
Income statement - continuing operations:
Revenue from external customers 75,913 21,370 9,999 - - 112,095
Inter segment revenue 4,451 585 378 (4,378) - -
Total revenue 80,454 21,839 10,377 (4,378) - 112,095
Underlying operating result* 5,806 2,521 363 - (5,302) 5,989
Net financing costs (325) (23) (6) - (1,525) (1,735)
Underlying segment result 5,481 2,498 357 - (6,827) 4,254
Separately disclosed items (see below) (21,715) (218) (3,823) - (1,745) (16,356)
Profit before tax (16,234) 2,278 (3,466) - (8,572) (12,102)
Specific disclosure items
Depreciation on owned plant, property and equipment 1,375 96 70 - 1 1,363
Depreciation on right-of-use assets 1,109 165 112 - 139 1,810
Accelerated depreciation on old website 241
Impairment of right of use assets 61 20 - - 456
Negative Goodwill (2,205)
Impairment of goodwill 22,005 - 3,065 - - 13,026
Impairment of intangible assets 284
Impairment of fixed assets 246
Amortisation 877 99 73 - - 1,116
Reconciliation of underlying operating result to operating profit:
Underlying operating result* 5,806 2,521 363 - (6,040) 2,650
Separately disclosed items (see below) (21,715) (218) (3,823) - (2,133) (27,888)
Operating profit/ (loss) (15,909) 2,303 (3,460) - (8,173) (25,238)
(*) Underlying operating result is continuing operations' operating profit
before separately disclosed items
Reconciliation of re-stated segment information for the period ended 30 June Great Britain Island of Ireland Benelux Inter-segmental transactions Central Total
2024
Costs continuing
£000 £000 operations
£000 £000 £000 £000
Underlying operating results in Half year 30 June 2024
Underlying operating results in prior year report 4,900 1,802 738 - (4,561) 2,879
Central costs reclassified across the Geographical segments (1,146) (106) (161) - 1,413 -
Underlying operating results, re-stated 3,754 1,696 577 - (3,148) 2,879
SEPARATELY DISCLOSED ITEMS Six months ended Six months ended Year ended
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Separately disclosed items within administrative expenses:
Acquisition costs 142 3 41
Amortisation of acquired intangibles 369 453 820
Accelerated depreciation of old website 197 241
Impairment of fixed assets 246
Impairment of goodwill - - 25,070
Impairment of right of use asset - - 81
Negative goodwill (646) (2,205)
Share-based payment costs 297 310 729
Restructuring costs 406 897 2,581
Total 765 1,663 27,888
· Acquisition costs relate to outline research into potential acquisition
opportunities which are presented to us.
· Share-based payment costs relate to the provision made in accordance with
IFRS 2 "Share-based payment" following the issue of share options to
employees.
· Restructuring costs related to restructuring activities of an operational
nature following acquisition of business units and other restructuring
activities in established businesses. Costs include restructuring advice,
service contract termination costs and employee redundancies.
4. TAXATION
Six months ended Six months ended Year ended
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Current tax on income for the period - continuing operations:
UK tax 119 145 130
Overseas tax 25 55 93
Adjustments in respect of prior periods/ other differences - - 47
Deferred tax charge (49) (113) (941)
Total taxation 67 87 671
The taxation for the period has been calculated by applying the estimated tax
rate for the financial year ending 31 December 2024.
5. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period. For diluted earnings per share the weighted
average number of ordinary shares in issue is adjusted to assume conversion of
all dilutive potential ordinary shares. The dilutive shares are those share
options granted to employees where the exercise price is less than the average
market price of the Company's ordinary shares during the period. For diluted
loss per share the weighted average number of ordinary shares in issue is not
adjusted.
Six months ended Six months ended Year ended
30 June 2025 30 June 2024 31
Dec
emb
er
202
4
Earnings Weighted average number of shares Earnings per share Earnings Weighted average number of shares Earnings per share Earnings Weighted average number of shares Earnings per share
£000 000's Pence £000 000's Pence £000 000's Pence
Basic earnings per share
Continuing operations (146) 63,275 (0.23p) 251 61,763 0.41p (26,406) 62,526 (42.23p)
Six months ended Six months ended Year ended
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Weighted average number of ordinary shares for basic and diluted earnings per 63,275 61,763 62,526
share
Impact of share options 33 85 85
Weighted average number of ordinary shares for diluted earnings per share 63,308 61,848 62,441
6. NET CASH FROM OPERATING ACTIVITIES
Six months ended Six months ended Year ended
30 June 30 June 31 December
2025 2024 2024
£000 £000 £000
Reconciliation of profit before taxation to net cash flows from operations:
Profit / (loss) from continuing operations before tax (79) 338 (27,077)
Depreciation and impairment on property, plant, and equipment 761 717 1,537
Depreciation on right-of-use assets (IFRS 16) 941 864 1,526
Impairment of right-of-use assets (IFRS16) - - 82
Finance costs 881 910 1,839
(Gain) / Loss on sale of plant and equipment (6) (2) -
Loan arrangement fee charged to income statement - (32) -
Amortisation of intangible assets 763 569 1,289
Impairment of fixed assets - - 246
Impairment of intangible assets - - 284
Negative goodwill (646) - (2,205)
Impairment of goodwill - - 25,070
Equity settled share-based payment charge 296 310 729
Settled share options - (75) (45)
Exchange différences on non-cash balances 58 (29) (128)
Operating cash inflow before changes in working capital and provisions 2,969 3,570 3,147
Change in trade and other receivables (4,219) (1,407) 3,310
Change in stocks 1,889 3,964 4,864
Change in trade and other payables 297 (3,112) (1,562)
Change in provisions (2) 31 (239)
Cash generated from operations 934 3,046 9,520
Tax paid (46) (247) (814)
Net cash generated / (used) from operating activities 888 2,799 8,706
7. PRINCIPAL RISKS AND UNCERTAINTIES
In common with all organisations, Flowtech faces risks which may affect its
performance. The Group operates a system of internal control and risk
management to provide assurance that we are managing risk whilst achieving our
business objectives. No system can fully eliminate risk and therefore the
understanding of operational risk is central to management processes. The
long-term success of the Group depends on the continual review, assessment,
and control of the key business risks it faces. The Directors set out in the
2024 Annual Report and Financial Statements the principal risks identified
during this exercise, including quality control, systems and site disruption
and employee retention. The Board does not consider that these risks have
changed materially in the last six months.
8. FORWARD-LOOKING STATEMENTS
This document contains certain forward-looking statements which reflect the
knowledge and information available to the Company during the preparation and
up to the publication of this document. By their very nature, these
statements depend upon circumstances and relate to events that may occur in
the future thereby involving a degree of uncertainty. Although the Group
believes that the expectations reflected in these statements are reasonable,
it can give no assurance that these expectations will prove to have been
correct. Given that these statements involve risks and uncertainties, actual
results may differ materially from those expressed or implied by these
forward-looking statements. The Group undertakes no obligation to update any
forward-looking statements whether because of new information, future events
or otherwise.
FURTHER ENQUIRIES TO:
Flowtech Fluidpower plc
Mike England, Chief Executive Officer
Russell Cash, Chief Financial Officer
Tel: +44 (0) 1695 52759
Email: investorrelations@flowtech.co.uk
(mailto:investorrelations@flowtech.co.uk)
Panmure Liberum Limited (Nominated adviser and joint broker)
Nicholas How, Director Investment Banking
Will King, Assistant Director, Investment Banking
Tel: +44 (0) 20 3100 2000
Singer Capital Markets (Joint broker)
Tom Salvesen, Head of Investment Banking
James Todd, Associate, Investment Banking
Tel: +44 (0) 207 496 3000
TooleyStreet Communications (IR and media relations)
Fiona Tooley
Tel: +44 (0) 7785 703523 or email: fiona@tooleystreet.com
(mailto:fiona@tooleystreet.com)
EDITORS NOTE:
Flowtech Fluidpower plc (AIM:FLO), is the largest supplier of fluid power
products, systems and solutions in the UK, Ireland, and Benelux. As a
specialist we have the expertise and experience our customers need to help
them minimise downtime, optimise performance and maximise the lifespan of
operations. Today, the Company is a strong market leader in a highly
fragmented £30bn European market. We work across virtually all industry
sectors, serving the needs of our customers who are designing, building,
maintaining, and improving industrial plant, equipment, and operations. To
read more about the Group, please visit: www.flowtech.co.uk
(http://www.flowtech.co.uk) .
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