Flowtech Fluidpower Share Discussion Threads

[edmundshaw] 11/6/2020 08:38

AGM voting: two resolutions were voted down:
1) To make political donations
2) To authorize directors to allot a further 10% of shares in the Company for cash (after a fisrt 10% without offering the shares to existing holders).

Seems some large shareholders were awake and actually checked the resolutions. If only a few more companies had alert shareholders...

[edmundshaw] 10/6/2020 12:49

Excellent outcome. Very happy to be fully invested here, and let's see if the new management can get us back to £2 over the next couple of years! :))

[shaker44] 10/6/2020 12:05

Looks oversold now imo

[davebowler] 10/6/2020 09:29

Zeus;
This morning’s trading update highlights that Flowtech has traded well during lockdown having been breakeven across April and May. This highlights the strength of the model and the inherent resilience of the MRO market. The business is seeing an improving trading performance as lockdown restrictions have begun to ease and it should be hoped that the positive trend in profitability will continue through the Summer. Having navigated lockdown better than most and with further cost initiatives to come through alongside the stated improvement in working capital, Flowtech finds itself in a strong position to capitalise once trading and the wider economy return to more normal levels. Forecasts will be reintroduced once we have increased visibility on the trajectory of the recovery in revenue and the wider economy.

Trading during lockdown resilient: FY20 had started positively but the introduction of lockdown at the end of March had a material impact with revenue declining 10.3% for Q1 with the last few weeks of March seeing revenue down 40%. This continued through April with May seeing an improvement but was still down 30% from the previous year. During this two month period the business traded at broadly breakeven in terms of EBITDA, in line with previous statements the Company had made about the breakeven level of the business.

[18bt] 10/6/2020 07:38

Pretty positive trading update, with return to profitability around now. This could therefore resume dividend payments, assuming that there are no strings attached to any Governement schemes. Diplomatically, I might expect a payment as a "final" in 2021.

[this_is_me] 10/6/2020 07:37

An encouraging A.G.M. statement today.

[davebowler] 22/5/2020 13:32

loafofbread posted this elsewhere-
River and Merc released their report this morning.
PORTFOLIO ACTIVITY - NEW POSITIONS AND EXITS
.......

Flowtech Fluidpower is a specialist distributor of fluid power products in the UK. The business has demonstrated consistently attractive gross margins. This is a self-help, Recovery investment case as cost savings and working capital synergies can improve margins and returns. The position was also acquired at an attractive valuation, despite our view that the business is under-earning, providing the prospect of material share price gains.
....

[meijiman] 12/5/2020 09:18

Hardly surprising when most of the stuff they bought expensively could be picked up for peanuts.

[this_is_me] 12/5/2020 07:13

It looks like there has been some falling out at board level.

[this_is_me] 30/4/2020 08:46

The announcement looks very good for the medium term.

[arthur_lame_stocks] 21/4/2020 12:33

I bought some of these too. I agree a return to work in the not too distant future could see these double in time. I hope they will focus on reducing debt though rather than paying dividends to shareholders.

[edmundshaw] 21/4/2020 12:16

Bought quite a few now with an historic and hopefully future yield of 11% to 13.7%.

Good recovery should mean a price doubling is achievable from here. And given the balance sheet is looking reasonable plus clients getting back to work in a couple of weeks or so, this looks fine in the medium term.

Parts for lorries, agricultural machinery, and at least some factories are surely going to keep some level of business ticking over. This is not a hostpitality sector car-crash stock!

[this_is_me] 21/4/2020 10:43

I bought in again, just a few, at just over 62p.

[arthur_lame_stocks] 21/4/2020 09:48

I think they said something like turnover would have to fall 35% for a sustained period before they fell to breakeven so plenty of scope for recovery. Gearing is a bit high for my liking though.

[muckshifter] 21/4/2020 08:55

Agree with you again This_is_me, they should eventually prosper again. I just hope that the covid crisis is resolved reasonably quickly by discovery of an effective treatment which might remove some of the uncertainty. But again my caveat: I haven't looked at the balance sheet and the possible effect of reducing turnover.

[this_is_me] 21/4/2020 07:51

Positive cash flow expected; going to be a survivor and should prosper when the current panic is over.

[davebowler] 20/4/2020 11:19

Zeus;
FY19 results in line but release delayed
Flowtech will release its Q1 FY20 trading update tomorrow (21st April) but FY19 results have been delayed due to challenges raised from the COIVD-19 situation. It is expected that the accounts will be reported within the next two weeks. Headline numbers are in line with that previously stated in the February trading update (13th February). The update provided earlier this month indicated that trading in the first quarter was in line with expectations, however, the increasing impact of the COVID-19 pandemic in the final weeks meant that trading in early Q2 had been materially impacted. The Q1 statement on Tuesday followed shortly after by the release of FY19 results should provide greater detail on how trading has progressed. The most recent trading update highlighted the resilience of the business, indicating that revenue would need to decline by 35% for a prolonged period for it to be breakeven and it had £9.4m headroom on its financing facilities. We leave forecasts in FY20 and FY21 unchanged for the time being, until there is greater clarity on trading from the impact of COVID-19.

Delay in results: FY19 results had been scheduled to be released on Tuesday morning (21st April) but due to logistical issues presented by COVID-19 they will now be released at some point over the next two weeks. Headline numbers contained in today’s statement are in line with expectations albeit gross margin of 35.7% is 100bps ahead of ZC estimates but PBT of £8.9m is inline. Net debt of £16.6m is as previously stated and shows progress from the £19.9m reported in FY18. Tomorrow’s Q1 statement should reiterate that the positive start to the year has been materially impacted by the pandemic with revenue reported in the 2nd April update as being 30% below expectations.

Balance sheet liquidity: At the end of Q1 net debt stood at £15.6m, c. £1.0m lower than at the end of Dec 2019. Available facilities stand at £25.0m providing c. £9.4m of headroom, until June 2021, on the position reported in early April. Discussions with the bank were on-going to extend the facilities beyond the current period and we would hope for an update, either, in the Q1 statement or the FY19 results. Flowtech is utilising Government financing schemes and had already implemented a cost reduction programme and an efficiency drive to improve working capital. The results should also provide further clarity as to the progress being made in conserving cash.

[edmundshaw] 02/4/2020 10:11

Pretty decent update, expecting to remain cash +ve through the year apart from perhaps the worst period at the nadir of business activity. Key provider to several sectors, and at just over 50p this looks a steal medium term.

Personally given COVID, I view getting in an experienced NED who manages difficult situations seems a coup rather than a warning sign - it is not as if this company is in financial trouble...

[pugugly] 01/4/2020 11:43

Mr Market does not like his appointment - Message received - the situation is worse than we thought -so need to bring in a salvage expert (maybe reading the sacred entrails wrongly but....e&oe!!)

[creditcrunchies] 19/3/2020 18:13

wowzer these have crashed more than the stock market itself looks like a fund manager has dumped its entire holding

[pugugly] 21/2/2020 12:31

podgyted = Thanks - Had not spotted China - Exclusive brands sounds like own label so might well (imo) create a significant sinkhole in product availability unless UK or European brands can be substituted - If this is the case could result in margin erosion (imo)

[podgyted] 21/2/2020 11:27

Think I'll wait for the results. Bit concerned about this (under risks):-

"The majority of the Group’s
products are sourced from
reputable ‘brands’ in the
UK and Europe. In addition,
for exclusive brands
sourced from China, the
Group has quality control
specialists who regularly visit
suppliers’ manufacturing
sites to ensure that high
quality standard operating
procedures are being
adhered to."