Flowtech Fluidpower PLC Q3 Group Trading Update (7520T)

TIDMFLO

RNS Number : 7520T

Flowtech Fluidpower PLC

17 October 2017

 
 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. 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 "Company")

Q3 Group Trading Update

"The Group's strong performance reflects the mix of further organic growth, up 12.4%,

and, acquisitive developments linked to consistent stable margins"

London: Tuesday, 17 October 2017: AIM listed specialist technical fluid power products supplier Flowtech Fluidpower plc (LSE: symbol FLO), issues the following unaudited Q3 Trading Update for the nine-month financial reporting period ended

30 September 2017:

GROUP Trading Update

Group revenue during the first nine months of the current year increased by 34.4%. Our strong performance is being driven by continued momentum across all the business divisions and further enhanced by the contribution from new subsidiaries.

 
 Revenue for the nine-month period 
  ended 30 September 2017 
                          YTD 2017         PYTD   Growth 
                                           2016 
 Flowtechnology          GBP28.33m    GBP26.62m       6% 
 Power Motion 
  Control (PMC)          GBP21.61m    GBP11.88m      82% 
 Process                  GBP4.51m     GBP2.00m     126% 
---------------------  -----------  -----------  ------- 
 Total Group revenue 
  for the period         GBP54.45m    GBP40.50m      34% 
---------------------  -----------  -----------  ------- 
 Net debt                GBP12.10m    GBP15.70m 
---------------------  -----------  -----------  ------- 
 

Since reporting our HY1 2017 results and market update in early September the business has experienced a solid trading period which remains in line with market expectations. Of note is organic sales growth in the Q3 period of 12.4%. The comparative quarter in 2016 reflects the period immediately following the June Brexit vote when markets and currencies softened, and consequently a strong rebound was expected. However, it is pleasing to report that combined with this expected uplift we delivered further organic growth through a mixture of price increases and strong volume gains at consistent gross margins - this is further evidence that our multi-channel strategy is gaining traction.

ACQUISITONS

Since the start of this financial year we have concluded six acquisitions of which, the following three were concluded during Q3:

   --      UK: Orange County (OCL) and Group HES 
   --      Europe: Hydroflex Hydraulics (Hydroflex) 

These acquisitions have all added or enhanced the Group's position with key European and global suppliers (such as Eaton Corporation, Danfoss Power Solutions, Parker Hannifin, Brugg Pipesystems and Ebsray Pumps), broadened our sector and geographical coverage, and added to our technical competence. Our four-channel approach to the creation of a fluid power specialist group is continuing to present further prospects for expansion, and the Board believes that the Group can continue to exploit this "pipeline" in both the short and medium term, whilst at the same time ensuring that net bank borrowings remain well within facilities.

INVESTMENT FOR THE FUTURE

By way of an update since the HY Report, the redesigned Shared Logistics Centre in Skelmersdale is now expected to be completed by the end of October. As well as modernised office and conference facilities, the enhanced layout will offer an increase in capacity of around 40% and, will deliver operational and stocking improvements for use by all our Profit Centres. It will also provide considerable scope for both the profitable integration of future acquisitions to the Group, and provide scope for further organic growth within the current portfolio. The process has been completed with no disruption to the market leading service level offered by the Skelmersdale operation. At the date of this announcement, we are currently working towards securing a dedicated new site in Knowsley, on Merseyside for our Shared Engineering Centre. This initiative when launched will enhance the Primary Fluid Power operation based nearby and underpin our objective of creating a Centre of Excellence and become recognised as a complete service provider to the fluid power sector. As we announced last week we are also to officially launch our Onsite Services Division in 2018.

SUMMARY

Our focus remains growth through both acquisitive and organic means backed up by our four-layered approach to extracting synergistic benefits over the short, medium and long term. This targeted approach ensures we can achieve both a concentration and enhancement to our product set which is the core of our business model.

The Board believe that the acquisitions so far, this financial year clearly reinforce the ongoing strategy to develop a focused Fluid Power Group that serves a wide number of industry sectors, allowing a de-risking of some of the cyclic nature of the business.

The Group's current performance will deliver another year of solid progress. As a business, we are confident in our strategy, commercial opportunities and the prospects of the Group and, the business remains on track to meet current market expectations for the year ending 31 December 2017.

 
 Enquiries: 
  Flowtech Fluidpower plc 
  Sean Fennon, Chief Executive 
  Bryce Brooks, Chief Financial Officer 
  Tel: [phone] 
  Email: [e-mail] 
 Zeus Capital Limited (Nominated Adviser and Broker) 
  Andrew Jones, Alistair Donnelly (corporate finance) 
  Dominic King, John Goold (sales & broking) 
  Tel: [phone] 
 
  finnCap Limited (Joint Broker) 
  Ed Frisby, Kate Bannatyne (corporate finance) 
  Rhys Williams, Emily Morris (sales & broking) 
  Tel: [phone] 
 
  TooleyStreet Communications (IR and media relations) 
  Fiona Tooley 
  Tel: [phone] 
  or email: [e-mail] 
 
 
 EDITORS NOTES 
------------------------------------------------------------------------------------------------------- 
 
   To listen to an interview with CEO, Sean Fennon and 
   CFO Bryce Brooks from 07.00hrs, please go to 
   Live link: https://www.brrmedia.co.uk/broadcasts-embed/59e4eb91affa4e6b10c67b29/event&popup=true 
 About Flowtech Fluidpower plc 
------------------------------------------------------------------------------------------------------- 
 Founded as Flowtech in 1983, the Flowtech Group is 
  the UK's leading specialist supplier of technical 
  fluid power products. The business joined AiM in 2014. 
  Today, the Group has four distinct divisions: 
 Division:              What we do:                               Locations: 
---------------------  ----------------------------------------  -------------------------------------- 
 Flowtechnology         Focus on supplying distributors           Flowtechnology Benelux 
                         and resellers of industrial               (Deventer) 
                         MRO products, primarily                   Flowtechnology China 
                         serving urgent orders                     (Guangzhou) 
                         rather than bulk offerings.               Flowtechnology UK 
                         It offers an unrivalled                   (Skelmersdale) 
                         range of OEM and Exclusive                Indequip (Skelmersdale) 
                         Brand products to over 
                         3,400 distributors and 
                         resellers. The catalogue 
                         is recognised as the 
                         definitive source for 
                         fluid power products, 
                         containing 100,000 individual 
                         product lines and are 
                         distributed to more 
                         than 80,000 industrial 
                         MRO end users. 
---------------------  ----------------------------------------  -------------------------------------- 
 Power Motion           Specialise in the design,                 Primary Fluid Power 
  Control                assembly and supply                       (Knowsley) 
  (PMC)                  of engineering components                 Nelson Fluid Power 
                         and hydraulic systems                     (Dublin, Lisburn, 
                         and is further enhanced                   Dungannon) 
                         by a service and repair                   TripleSix (West Yorkshire) 
                         function.                                 Albroco (Knowsley) 
                                                                   Hydraulics & Transmissions 
                                                                   (Ludlow) 
                                                                   HiPower Hydraulics 
                                                                   (Cork, Dublin, Belfast 
                                                                   Manchester) 
                                                                   Hydroflex (Brussels, 
                                                                   Rotterdam and OudBeijerland) 
                                                                   Hydraulic Equipment 
                                                                   Supermarkets (Gloucester, 
                                                                   Leeds, Birmingham, 
                                                                   Durham) 
                                                                   Branch Hydraulics 
                                                                   (Gloucester) 

---------------------  ----------------------------------------  -------------------------------------- 
 Process                Focus on the supply                       Hydravalve (Willenhall) 
                         of industrial components                  Orange County (Spennymoor) 
                         and solutions to the 
                         process sectors. 
---------------------  ----------------------------------------  -------------------------------------- 
 Onsite Services        In 2018, the Group will                   HES Onsite (Durham, 
                         extend its service offering               Leeds, Birmingham, 
                         to include Onsite Technical               Gloucester) 
                         Maintenance 
                         through highly skilled 
                         engineers. 
---------------------  ----------------------------------------  -------------------------------------- 
 All four of the Group's divisions have overlapping 
  product sets, allowing procurement synergies to be 
  maximised. 
 The above divisions are supported by a centralised 
  back office team at the Skelmersdale site and a procurement 
  and quality control team in Shanghai. In total, the 
  business employs over 400 people. For more information 
  please visit, www.flowtechfluidpower.com 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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October 17, 2017 02:00 ET (06:00 GMT)