REG - Flowtech Fluidpower - Full Year Trading Update & Acquisition

Flowtech FluidpowerAnnouncement

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RNS Number : 5849P  Flowtech Fluidpower PLC  20 January 2026

 NEWS RELEASE

 Issued on behalf of Flowtech Fluidpower plc

 Immediate Release

 Tuesday 20 January 2026

 

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")

Our aim is to provide our customers with power, motion & control
solutions, from a single component to integrated engineering systems, in the
most cost-effective way, harnessing the best global brands & products,
services and engineers in the market.

 

FULL YEAR TRADING UPDATE & ACQUISITION

 "Underlying EBITDA for FY25 is expected to be in the region of £7.7m, broadly
 in line with expectations and reflecting a small number of large projects
 expected in Q4 25 slipping into Q1 26. Overall, we have seen increased growth
 momentum building in the second half of the year, driven by our continued,
 disciplined focus on self-help growth initiatives, resulting in EBITDA
 performance in H2 25 outpacing that reported in H1 25.

 We enter 2026 with a stronger sales pipeline and orderbook, stable gross
 margins, reduced overheads and further improvements in working capital and net
 debt.  We note positive momentum in all four of our self-help growth
 initiatives.

 Focus now turns to exploiting our scalable and efficient platform for growth:
 accelerating value creation, unlocking both organic and inorganic growth
 opportunities and realising the full potential for Flowtech as a market leader
 in a highly fragmented market.

 In line with this growth strategy, we are delighted to announce today the
 acquisition of Q Plus in the Netherlands. A well-known and highly respected
 market specialist in the field of pneumatics, automation, compressed air and
 vacuum solutions. This is an exciting moment for all of us, as we expect the Q
 Plus acquisition to double the size of our business in the Benelux and
 positions Flowtech as one of the market leaders in this field. The acquisition
 of Q Plus is an attractively priced, earnings enhancing addition to the Group
 and is fully in line with our renewed growth strategy to further expand our
 position into the European market by reinforcing our scale and presence in the
 Netherlands. We would like to welcome our new colleagues to the Flowtech Group
 and are looking forward to embarking on this exciting journey together"

 Mike England, CEO

2025 TRADING UPDATE

 

The Board expects underlying EBITDA for the year ended 31 December 2025 to be
in the region of £7.7m with revenues of £116.9m. EBITDA has recovered
strongly since H2 24 with Flowtech reporting EBITDA in H1 25 of £3.5m,
increasing to £4.2m in H2 25 and the Board believes that this improved
momentum is being carried into 2026.

 

 Regional revenue:                   FY          FY        Change

                                     2025        2024      2025

                                     Unaudited   Audited   v

                                     £'m         £'m       2024
 Great Britain                       84.8        75.9      8.9
 Island of Ireland                   22.7        21.4      1.3
 Benelux                             9.5         10.0      (0.5)

 Total Group revenue for the period  116.9       107.3     9.6
 Net debt*                           15.4        15.1      0.3

 

 Notes

 *Excludes IFRS16 related debt

 Consensus forecasts FY25 prior to this announcement were: revenue of £117.9m
 and underlying EBITDA £8.4m

Revenue in the year increased by £9.6m (+8.9%). Excluding the impact of
acquisitions, like for like revenues in the year were down a £3.0m (3.0%)
reflecting the previously announced H1 25 reduction of 11.9%, offset in part
by strong like for like growth of 7.6% in H2 25.

 

We enter 2026 with a stronger sales pipeline and orderbook, stable gross
margins, reduced overheads and further improvements in working capital and net
debt.  We note positive momentum in all four of our self-help growth
initiatives;

i) New website launched in August and already showing improved trends in
traffic and new customer acquisition

ii) Introduction of new supplier agreements and subsequent product range
expansion

iii) +20% increase in the Group orderbook in engineering projects as at
January 2026 compared to same time last year

iv) Strong revenue growth with positive EBITDA contribution from our three
recently acquired businesses

As a result, we have now transitioned from the 'business transformation phase'
into the 'grow and build phase' of our value creation plan.  The important
work achieved over the past two-years implementing the refreshed strategy,
integrating many separate businesses into One Flowtech, embedding the core
foundations and necessary commercial, operational and technology improvements,
has enabled the scalable and efficient platform for growth that exists
today.

 

Management discipline has delivered stable, sustained gross margins and has
enabled further reductions in overheads and working capital.  In 2025,
excluding the impact of acquisitions, operating overheads reduced by 6% and
working capital by 11%.

 

Net debt* increased by £0.3m to £15.4m at year end (2024: £15.1m); this
represents a £3.1m reduction from the position at the end of H1 25.  The
combination of restructuring activity and necessary capital investment
impacted on our ability to reduce debt in 2024 and 2025. However, looking
forward, with the combination of anticipated further progress in our growth
initiatives, lower capital investment and continued control over working
capital, we expect stronger cash conversion and to materially improve our
leverage position.

 

Despite our self-help progress, a strong orderbook and exiting 2025 with more
positive growth momentum, we do not expect UK market conditions to improve in
the near-term and, in addition, we expect the increase in national minimum
wage to further impact overheads.  As such, the company continues to take a
prudent view on underlying performance and outlook until such time that there
are signs of market stability and recovery. More positively, the acquisition
of Q Plus announced today is an attractively priced, earnings enhancing
addition to the Group and an exciting opportunity to transform our Benelux
business and expand our European scale and capabilities.

 

ACQUISITION OF Q PLUS

 

Flowtech is pleased to announce that its wholly owned subsidiary Flowtech
Benelux B.V., has entered into an Acquisition Agreement with Q Plus Beheer
B.V. ("Seller") to conditionally acquire the entire issued share capital of Q
Plus B.V. and Naili Europe B.V., private limited liability companies
incorporated under the laws of the Netherlands, that operate under the name Q
Plus (the "Acquisition").

 

ACQUISITION HIGHLIGHTS

 

·      Q Plus is one of the largest independent pneumatic and compressed
air specialists in the Netherlands, with a diversified, customer base across
different industries and a strong foothold in the OEM and machine building
sector. Q Plus is highly recognised for its application knowledge, engineering
and design expertise.

·      The Board believes that the Acquisition is highly complementary
to the existing Flowtech business. The clear strategic rationale for the
Acquisition includes expanding Flowtech's capabilities, broadening its
customer base and strengthening its European presence.

·      Q Plus has an attractive historical growth profile and the
results for FY 2025 are expected to show continuing momentum in revenue and
profit growth.

·      For the year ended 31 December 2024, Q Plus's aggregated
financial results showed €12.5 million of revenue and profit before tax of
€1.0 million. Gross assets as at 31 December 2024 were €6.7 million. For
the year ended 31 December 2025, Flowtech expects that Q Plus will generate
revenue of €12.9 million and €1.9 million of adjusted EBITDA.

·      The Acquisition presents numerous synergy opportunities across
cost, gross margin and growth initiatives , which are expected to
significantly contribute to EBITDA and cash generation improvement.

·      The aggregate consideration payable to the Seller for Q Plus
pursuant to the Acquisition Agreement is €5,869,000, which is to be
satisfied as follows:

o  Cash consideration of €4,119,000 on completion of the Acquisition
("Completion");

o  €1,250,000 through a vendor loan; and

o  €500,000 maximum of deferred consideration via an earn-out mechanism.

·      The aggregate consideration is based on an enterprise value of
€9,250,000 (c.£8m) on a cash free debt free basis, representing a multiple
between 4.6x (2025) and 5.5x (2024) adjusted EBITDA.

·      The Acquisition Agreement also provides for the repayment of
intercompany debt owed by the Target to the Seller of €1,955,794, which
shall be repaid by the Purchaser on Completion.

·      There will also be an adjustment at Completion for the agreed
normalised working capital levels in connection with the Acquisition.

·      The Cash Consideration will be funded by a Placing at the Issue
Price of 53 pence per Placing Share to raise gross proceeds for the Company of
approximately £9 million (before fees and expenses). The Placing is being
launched shortly after this Announcement by way of a separate announcement
("Placing Announcement"). In addition, the Company will also separately
announce a Retail Offer to raise gross proceeds of up to £1 million for the
Company (before fees and expenses) to allow retail Shareholders an opportunity
to participate in the Fundraising at the same price as the Placing.

·      The Placing and Retail Offer in aggregate will also enable the
Group to pay down a portion of debt which will improve leverage multiples and
increase financial flexibility. The Board believes this represents an
opportunity to further enhance the investment case of the combined group.

 

Mike England, Chief Executive of Flowtech, commented:

"The announcement today of the acquisition of Q-Plus, the leading independent
Pneumatics and Compressed Air specialist in Netherlands, is an exciting
opportunity to transform our Benelux business and expand our European scale
and capabilities.  We are delighted to welcome our new colleagues to
Flowtech"

 

Q Plus founder Rijk van Dongen, commented:

"It has been my life's work to develop and grow Q Plus to the well-respected
business that we have today in our market. I am really happy to have been able
to find a good home for my people, colleagues and friends in Q Plus, as
Flowtech is a fantastic cultural fit in which the passion for motion control
and customer service fully resonates in the values of both companies. I feel
reassured that together, this will provide very exciting opportunities"

 

Further information on the Acquisition, including the expected timetable of
principal events, is set out below. This Announcement should be read in its
entirety.

 

Unless the context otherwise provides, capitalised terms used in this
Announcement have the meanings ascribed to them in the section headed
"Definitions" at the end of this Announcement.

 

 

 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)

 Panmure Liberum (Nominated Adviser and Joint Bookrunner)

 Nicholas How, Managing Director, Investment Banking

 Will King, Assistant Director, Investment Banking

 Tel: +44 (0) 20 3100 2000

 Singer Capital Markets (Joint Bookrunner)

 Sara Hale, Head of Investment Banking

 James Todd, Assistant Director, 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.flowtechfluidpower.com
 (http://www.flowtechfluidpower.com) .

 

INTRODUCTION

 

The Company is pleased to announce that its wholly owned subsidiary Flowtech
Benelux B.V., has entered into the Acquisition Agreement with the Seller to
conditionally acquire the entire issued share capital of Q Plus B.V. and Naili
Europe B.V. (together, the "Target"), private limited liability companies
incorporated under the laws of the Netherlands that operate under the name Q
Plus, a technical wholesaler specialised in pneumatics and compressed air
solutions offering a wide range of products, including pneumatic cylinders,
fittings, valves and air distribution systems.

 

The Board believes that Q Plus is highly complementary to the existing
Flowtech business, expanding the Group's product and service offerings in
Europe and is in accordance with the Group's capital allocation priorities to
drive future profitable growth.

 

The aggregate consideration payable to the Seller for Q Plus is €5,869,000
which is to be satisfied: (a) on Completion as to €4,119,000 in cash; (b) as
to €1,250,000 through a vendor loan; and (c) by a deferred earn-out
consideration payment capped at €500,000. There will also be a cash
adjustment at Completion for the agreed normalised working capital levels in
connection with the Acquisition.

 

The aggregate consideration is based on an enterprise value of €9,250,000
(c.£8m) on a cash free debt free basis, representing a multiple between 4.6x
(2025) and 5.5x (2024) adjusted EBITDA.

 

Under the terms of the Acquisition Agreement, in the event that the EBITDA
amount achieved by Q Plus in its 2025 financial year exceeds €1,450,000
(c.£1.26m), the Seller shall be entitled to an amount equal to €2.50
(£2.17) for every €1.00 (£0.87) by which the EBITDA in 2025 exceeds
€1,450,000 (capped at €500,000). Accordingly, the maximum earn-out
consideration of €500,000 shall be payable to the Seller if the EBITDA in
2025 amounts to €1,650,000 or higher. If the EBITDA in 2025 does not exceed
€1,450,000, no earn-out consideration shall be payable.

 

The Acquisition Agreement also provides for the repayment of intercompany debt
owed by the Target to the Seller of €1,955,794, which shall be repaid by the
Purchaser on Completion.

 

The Cash Consideration will be funded by a Placing at the Issue Price of 53
pence per share which is being announced later today and is expected to raise
approximately £9 million for the Company (before fees and expenses). In
addition, Flowtech will also separately announce a Retail Offer to raise gross
proceeds of up to £1 million (before fees and expenses), to allow retail
Shareholders an opportunity to participate in the Fundraising at the same
price as the Placing.

 

The Fundraising is conditional upon, amongst other things, the approval by the
Shareholders of the Resolutions to be proposed at the General Meeting. The
Fundraising will not be underwritten. The Resolutions must be passed by
Shareholders at the General Meeting in order for the Fundraising to proceed.
The Fundraising is not conditional on the completion of the Acquisition but
the Joint Bookrunners have a right to terminate the Placing Agreement if the
Acquisition Agreement terminates before Admission. The only condition to
completion of the Acquisition is passing of the Resolutions. Completion of the
Acquisition is not conditional on Admission, and it is expected that
completion of the Acquisition will occur within 2 business days of the Company
receiving the placing proceeds from the Joint Bookrunner.

 

If the conditions relating to the issue of the Placing Shares are not
satisfied or the Placing Agreement is terminated in accordance with its terms,
the Placing Shares will not be issued and the Company will not receive the
associated placing monies. In this scenario, the Retail Offer will similarly
not proceed and the Acquisition would need to be funded by other means to the
extent that the Placing Agreement is terminated for any other reason than the
Resolutions not being passed.

 

BACKGROUND INFORMATION ON FLOWTECH

 

Flowtech is one of the largest providers of fluid power products, services and
solutions in the UK, Ireland and Benelux, and a strong market leader in the
highly fragmented estimated £30bn European Motion Control market. Flowtech's
products include hydraulic, pneumatic and process components used to transmit
and control power in machinery serving industrial, manufacturing, maintenance
and engineering markets.

 

Flowtech positions itself as a market leader through:

·      Broad product range of A-brands as well as own brands;

·      Technical and engineering services and support capabilities; and

·      A strong reputation built over decades of industry service.

 

Flowtech's strategy includes acquiring complementary businesses to expand
product and service range, technical capability and geographic reach,
including the recent acquisitions of Thorite, Allswage and the Thomas Group in
the UK. All three acquisitions (Thorite, Allswage and Thomas) are making a
positive contribution with an (unaudited) exit run rate of £20m and £2m
EBITDA for 2025.

 

INFORMATION ON Q PLUS

 

Overview of Q Plus

 

Q Plus is one of the largest independent pneumatic and compressed air
specialists in the Netherlands.  Headquartered in Sliedrecht, with
approximate 30 FTE's, Q Plus offers over 8,000 products to its extensive
(1,800) customer base. Q Plus has a strong market reputation and is widely
recognised for its application knowledge, technical expertise and
capabilities. With almost 40 years of existence, Q Plus has shown a consistent
solid financial performance with a strong foothold in the industry, in
particular with customers in the OEM, machine building and service providers.

 

For the year ended 31 December 2024, Q Plus's aggregated financial results
showed €12.5 million of revenue and profit before tax of €1.0 million.
Gross assets as at 31 December 2024 were €6.7 million. For the year ended 31
December 2025, Flowtech expects that Q Plus will generate revenue of €12.9
million and €1.9 million of adjusted EBITDA.

 

BACKGROUND TO AND REASONS FOR THE ACQUISITION

 

The Flowtech Board believes that Q Plus is strategically an ideal fit for
Flowtech's existing activities in the Netherlands, providing complementary
expertise and technical capabilities in the field of pneumatics, compressed
air and vacuum solutions. Q Plus's strong product and service offering is
aligned with the key focus areas of Flowtech's strategy on value-add
proposition, providing further growth opportunities in our end-market
approach. The combination of Q Plus and Flowtech's existing businesses in the
Benelux is expected to result in a market leader position in the field of
pneumatics and compressed air solutions.

 

Since 2024 Flowtech has invested in building a new and capable Benelux team,
laying the foundations to support the Company's European growth ambition.
The team now in place is well equipped to integrate Q Plus and, on completion,
will be augmented by the addition of Q Plus's own high quality senior
management.

 

The Board believes Q Plus represents an attractively priced, earnings
enhancing acquisition which will positively contribute to the EBITDA and cash
flows of the Flowtech Group.

 

KEY SYNERGY OPPORTUNITIES FROM THE ACQUISITION

 

Flowtech has developed an integration plan for the Acquisition which it
intends to implement on Completion. The Directors believe that the Acquisition
presents numerous synergy opportunities across cost, gross profit and growth
initiatives, including:

·      Optimising headcount, warehouse facilities and working capital

·      Accelerating the digital proposition supported by a local expert
team

·      Leveraging on the engineering and technical expertise of Q Plus

·      Optimisation of assortment, supplier base and purchase pricing

·      Enhanced cross selling opportunities with the strong customer
base in the OEM and machine building industry

 

The Company has experience integrating other businesses into its group, with
its three most recent acquisitions now making a positive contribution to the
group with an (unaudited) exit run rate of £20m and £2m EBITDA for 2025.

 

FINANCIAL EFFECTS OF THE ACQUISITION

 

The Directors expect that the Acquisition will significantly contribute to
EBITDA and cash generation improvement.

 

Following Completion, pro-forma revenues of the enlarged Benelux business are
expected to be £21m of which £15m will be attributable to Pneumatics
revenues. The Board expects the enlarged Group to be highly cash generative
which will improve leverage multiples and increase financial flexibility.

 

PRINCIPAL TERMS OF THE ACQUISITION

 

·      The parties to the Acquisition Agreement are Q Plus Beheer B.V.
as Seller and Flowtech Benelux B.V. as Purchaser;

·      The Acquisition Agreement is governed exclusively by Dutch law;

·      Completion is conditional solely on shareholder approval to the
Resolutions being obtained;

·      The aggregate consideration payable under the Acquisition
Agreement is €5,869,000, which shall be made up of:

o  Cash consideration of €4,119,000;

o  €1,250,000 of vendor loan; and

o  €500,000 maximum of deferred consideration via an earn-out mechanism;

·      The Purchaser shall repay €1,955,794 of intercompany debt owed
by the Target to the Seller on Completion;

·      The Acquisition Agreement contains customary warranties and
indemnities;

·      Completion is expected to take place by no later than 16 February
2025.

 

EXPECTED TIMETABLE OF EVENTS

 

 Announcement of the Acquisition                    20 January 2026
 Announcement of the Placing                        20 January 2026
 Announcement of the Retail Offer                   20 January 2026
 Announcement of the results of the Placing         20 January 2026
 Publication of the Circular                        21 January 2026
 Announcement of the results of the Retail Offer    22 January 2026
 Latest time and date for receipt of completed      10.00 a.m. on 4 February 2026

 proxy appointments and CREST voting instructions
 General Meeting                                    10.00 a.m. on 6 February 2026
 Announcement of results of General Meeting         6 February 2026
 Admission and commencement of dealings in          8.00 a.m. on 9 February 2026

 the New Ordinary Shares on AIM
 Completion of the Acquisition                      By no later than 16 February 2026

 

NOTES:

 

1.     All references to times in this document are to London time.

2.     The dates and times set out in the above timetable and in the rest
of this document are indicative only and may be subject to change. If any such
dates and times should change, the revised times and/or dates will be notified
by the Company by announcement via RIS.

3.     All events in the above timetable scheduled to take place after the
General Meeting are conditional on the approval by the Shareholders of the
Resolutions.

 

DEFINITIONS

 

Any terms not defined herein shall have the meanings set out in the Placing
Announcement.

 

IMPORTANT NOTICES

 

Panmure Liberum is authorised and regulated by the FCA in the United Kingdom
and is acting exclusively for Flowtech and no one else in connection with the
Placing, and Panmure Liberum will not be responsible to anyone (including any
Placees) other than Flowtech for providing the protections afforded to its
clients or for providing advice in relation to the Placing or any other
matters referred to in this Announcement.

 

Singer Capital Markets is authorised and regulated by the FCA in the United
Kingdom and is acting exclusively for Flowtech and no one else in connection
with the Placing, and Singer Capital Markets will not be responsible to anyone
(including any Placees) other than Flowtech for providing the protections
afforded to its clients or for providing advice in relation to the Placing or
any other matters referred to in this Announcement.

 

No representation or warranty, express or implied, is or will be made as to,
or in relation to, and no responsibility or liability is or will be accepted
by the Joint Bookrunners or by any of their respective Representatives as to,
or in relation to, the accuracy or completeness of this Announcement or any
other written or oral information made available to or publicly available to
any interested party or its advisers, and any liability therefore is expressly
disclaimed.

 

The responsibilities of Panmure Liberum as Flowtech's nominated adviser under
the AIM Rules for Nominated Advisers are owed solely to the London Stock
Exchange and are not owed to Flowtech or to any Director or to any other
person.

 

This Announcement may contain, or may be deemed to contain, "forward-looking
statements" with respect to certain of Flowtech's plans and its current goals
and expectations relating to its future financial condition, performance,
strategic initiatives, objectives and results. Forward-looking statements
sometimes use words such as "aim", "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "seek", "may", "could",
"outlook" or other words of similar meaning. By their nature, all
forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances which are beyond the control of Flowtech,
including amongst other things, United Kingdom domestic and global economic
business conditions, market-related risks such as fluctuations in interest
rates and exchange rates, the policies and actions of governmental and
regulatory authorities, the effect of competition, inflation, deflation, the
timing effect and other uncertainties of future acquisitions or combinations
within relevant industries, the effect of tax and other legislation and other
regulations in the jurisdictions in which Flowtech and its affiliates operate,
the effect of volatility in the equity, capital and credit markets on
Flowtech's profitability and ability to access capital and credit, a decline
in Flowtech's credit ratings; the effect of operational risks; and the loss of
key personnel. As a result, the actual future financial condition, performance
and results of Flowtech may differ materially from the plans, goals and
expectations set forth in any forward-looking statements. Any forward-looking
statements made in this Announcement by or on behalf of Flowtech speak only as
of the date they are made. Except as required by applicable law or regulation,
Flowtech expressly disclaims any obligation or undertaking to publish any
updates or revisions to any forward-looking statements contained in this
Announcement to reflect any changes in Flowtech's expectations with regard
thereto or any changes in events, conditions or circumstances on which any
such statement is based.

 

No statement in this Announcement is intended to be a profit forecast or
estimate, and no statement in this Announcement should be interpreted to mean
that earnings per share of Flowtech for the current or future financial years
would necessarily match or exceed the historical published earnings per share
of Flowtech.

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