REG - Flowtech Fluidpower - Trading Statement

Flowtech FluidpowerAnnouncement

26/01/2022 07:05

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RNS Number : 6254Z  Flowtech Fluidpower PLC  26 January 2022

 NEWS RELEASE

 Issued on behalf of Flowtech Fluidpower plc

 Immediate Release

 Wednesday 26 January 2022

 

The information contained within this announcement is deemed by the Company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

FLOWTECH FLUIDPOWER PLC

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

Specialist full-service supplier of technical fluid power products and
services

 

TRADING UPDATE AND NOTICE OF RESULTS

 

The Board of Flowtech issues the following unaudited Trading Update ahead of
the Group's preliminary results for the year ended 31 December 2021.

2021 TRADING UPDATE

We expect to report Group revenue of c£109.0m, a 14.6% increase against the
COVID-19 impacted 2020 comparative. We have included 2019 revenue in the table
below to provide more meaningful comparisons. In summary our revenues are much
improved in 2021 but have not yet reached pre pandemic levels.

 

 Segment revenue:                    FY          FY         FY           Change  Change

                                     2021        2020       2019         2021    2021

                                     Unaudited   Audited*   Audited*     v       v

                                     £'m         £'m        £'m          2020    2019
 Flowtech                            52.1        46.1       52.2         13.2%   -0.1%
 Fluidpower Group Solutions*         39.6        33.6       44.1         17.9%   -10.4%
 Fluidpower Group Services*          17.3        15.4       16.1         11.9%   7.5%

 Total Group revenue for the period  109.0       95.1       112.4        14.6%   -3.0%
 Net debt**                          15.4        11.6       16.6

 

**Excludes IFRS16 related debt; FY2020 figure includes c.£0.9m of deferred
VAT linked to Government COVID-19 related support schemes.

 

Overall, we expect our FY2021 underlying profit *** to be in line with the
Board's expectations.

 

NET DEBT

Net debt** at 31 December 2021 was £15.4m, representing a £3.8m increase
compared with £11.6m at 31 December 2020. The increase reflects the necessary
investment we have made in our inventory position, designed to provide some
protection against the significantly increased lead times that are now
prevalent, as well as the recovery of our revenue streams and the associated
increase in our trade receivables.

 

DEVELOPMENTS IN GROUP STRATEGY

In April 2021 we detailed the key elements of our growth strategy, and we have
continued to make progress in key areas:

 

 ·      Branding - As anticipated, the consolidation of the constituent
 parts of our Flowtech division was completed on 4 January 2022. This has
 involved significant cross functional time and effort that has enabled a
 platform for growth.

 ·      Digital - After some delays caused by a third party, our new
 E-Commerce platform will be launched in Q1. In the interim we have used
 current architecture to merge all online accounts into www.flowtech.co.uk
 (https://www.flowtech.co.uk) .  Once launched, the new platform will benefit
 from other aspects of our digital project and be a key component of our plans
 to deliver organic growth.

 

OUTLOOK & DIVIDEND

Whilst demand throughout the fluid power market has continued to recover, it
is clear that it will be well into 2022, if not longer, before global supply
chains for fluid power product return to pre pandemic levels of both
consistency and breadth of supply. Good progress against our strategic
objectives continues to enhance the Group's medium term prospects. However,
until supply is fully recovered, the Board is more cautious in the short term
outlook.

 

Overall, the Board is satisfied with the trading performance in the year, is
encouraged by the start to 2022, and pleased with the progress made against
our key strategic objectives.

 

The Board expects to reintroduce a final dividend payment for the financial
year 2021. Thereafter our dividend policy will recognise both the growth
requirements of the business and the interests of our shareholders.

 

NOTICE OF RESULTS

The Company will update shareholders further at the time of the 2021
preliminary results announcement, scheduled to be released by the end of March
2022.

 

Roger McDowell, Non-Executive Chair commented:

 

"Whilst prioritising the wellbeing of our people the business has made solid
progress against both our strategic goals and trading, notwithstanding supply
chain challenges. Whilst there are still headwinds, we expect this momentum to
continue in 2022 and remain confident for the future."

 

 

 

Notes

*  Prior to 2021 Flowtech and Fluidpower Group Solutions figures were
reported under one accounting segment, Components. The aggregate revenue shown
in the table in this RNS equates to that reported under the heading of
Components in the 20199 and 2002 annual report and accounts.

 

** Our reported Net debt figure does not take account of IFRS16 related debt
which has reduced by c£0.25m in the year.

 

*** Underlying profit is profit before tax, asset impairment and separately
disclosed items which comprise costs relating to amortisation, restructuring,
acquisition and share based payments.

 

 

 

 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)

 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 employs
 618 people.

 For more information please visit,  Our business | Flowtech Fluidpower plc
 (https://www.flowtechfluidpower.com/our-business/)

 

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