REG - Flowtech Fluidpower - Trading update & Notice of Half-year results

Flowtech FluidpowerAnnouncement

31/07/2023 07:00

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RNS Number : 6422H  Flowtech Fluidpower PLC  31 July 2023

 NEWS RELEASE

 Issued on behalf of Flowtech Fluidpower plc

 Immediate Release

 

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.

 

 

London: Monday, 31 July 2023

 

 

 

FLOWTECH FLUIDPOWER PLC

(the "Group")

Group Trading Update and Notice of Interim Results

 

 

Flowtech Fluidpower plc (LSE: FLO), the specialist technical provider of fluid
power and motion control products and engineering services provides a trading
update for the six months ended 30 June 2023 (HY1 2023).

 

GROUP Trading Update

Overall Group revenue has grown by 2.6% in the period with a mixed performance
between the divisions.  The Solutions and Services divisions have continued
to operate well, showing strong growth, however, the performance of the
Flowtech division has been disappointing with a decline in revenue of 5.7%.
 Given the lower gross margins in the Solutions and Services divisions and
the underperformance of the Flowtech division, Group EBITDA in HY1 2023 is
behind Board expectations.

 

                                     HY1 2023   HY1 2022       FY2022       cHANGE
                                     Unaudited  Unaudited (+)  Audited (+)  HY1 2023 v HY1 2022
                                     £m         £m             £m
 Segment revenue:
 Flowtech                            26.6       28.2           53.3         -5.7%
 Fluidpower Group Solutions          22.0       19.8           40.4         11.2%
 Fluidpower Group Services           10.4       9.5            21.1         9.5%
 Total Group revenue for the period  59.0       57.5           114.8        2.6%

 Net debt (*)                        15.6       19.7           16.0         £4.1m

 

 (*) Net debt is Bank debt less cash and cash equivalents.  It excludes lease
 liabilities under IFRS16.

 (+) From January 2023 certain business which was previously accounted for
 within Flowtech was transferred to Solutions. To ensure meaningful comparisons
 are made we have restated the HY1 2022 and FY2022 numbers to reflect this.

 

 

Pre IFRS 16 net debt was £15.6m as at 30 June 2023 (HY1 2022: £19.7m), a
reduction of £4.1m in the past year, leaving an unutilised £9.4m on the
Group's £25m banking facilities.  Management continues to focus on working
capital efficiency and net debt is expected to reduce in the second half of
the year.

 

Mike England, who took over as CEO in April, said:

 

"In the Flowtech division, specific actions are in flight to address
commercial and operational shortfalls adversely impacting performance, some of
which require targeted new capital investment and some to address legacy
issues; we intend to comment more on this at the time of the interim results.
 We are generally pleased with the HY1 growth and contribution from our
Solutions and Services divisions.  There are however adverse market headwinds
into HY2 with several OEMs citing a slowdown in project velocity and a more
general cooling across the broader industrial markets.  For these reasons the
Board now expects the out-turn for FY23 to be significantly behind previous
expectations.**

 

In my first three months, I have made early decisive decisions to establish a
stronger platform for market share growth and improved margins in 2024 and
beyond.  This has included a swift programme of change in managerial
leadership and implementing the plan to further simplify our operating model
to release the full potential of the Group, improving the overall service and
value proposition for our customers and to deliver greater efficiencies as we
scale.  As part of this, we will continue to maintain tight control of our
costs whilst making the right strategic investments for the future.  Our
focus on cash management will continue; this will include a refreshed review
of all aspects of inventory management where we believe there is further
progress to be made.

 

Despite these current challenges, I am excited by the potential for the Group
given the quality of the brand, knowledge and technical capability of our
people, the depth and breadth of the product and engineering service offering
and the opportunity for expansion, market share growth and the potential for
margin improvement."

 

NOTICE OF RESULTS

The Group is planning to announce unaudited interim results for the period
ended 30 June 2023 on Wednesday, 30 August 2023, which will be available to
view and download from the Group's website, www.flowtechfluidpower.com
(http://www.flowtechfluidpower.com) .  The Group will also be holding a
'live' presentation which will be hosted by CEO Mike England and CFO Russell
Cash via the Investor Meet Company platform at 10.00am on Wednesday 30 August
2023:  Registration to join the event can be made following this link:

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

 

 

 

(**)  Market expectations compiled by the Company prior to this announcement
for the year ending 31 December 2023 were; Group revenue c.£119.4m;
 underlying EBIT of c.£9.9m, and profit before tax of c.£8.8m.

 

 

 

 ENQUIRIES:

 Flowtech Fluidpower plc

 Mike England, Chief Executive Officer

 Russell Cash, Chief Financial Officer

 Tel: +44 (0) 1695 52759

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

 Liberum Capital Limited (Nominated adviser and Sole Broker)

 Richard Lindley / Ben Cryer / 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)

 

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