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Share Name Share Symbol Market Type Share ISIN Share Description
Flowtech Fluid. LSE:FLO London Ordinary Share GB00BM4NR742 ORD 50P
  Price Change % Change Share Price Shares Traded Last Trade
  +1.25p +1.06% 119.00p 8,422 16:35:14
Bid Price Offer Price High Price Low Price Open Price
115.50p 122.50p - - -
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Alternative Energy 78.29 6.04 9.69 12.3 72.5

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Date Time Title Posts
21/11/201810:58Flowtech Fluidpower343
22/3/201814:18Interview with Zeus Capital: Flowtech Fluidpower1
29/7/200817:56Go with the FLOMERICS - Lowly rated growth and short term arb play1,783
28/3/200815:31Where is Flomerics Heading?54

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Flowtech (FLO) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2018-12-14 16:37:04116.003,5704,141.20O
2018-12-14 15:41:54119.951,2421,489.84O
2018-12-14 14:08:50115.644046.26O
2018-12-14 09:22:10116.003,5704,141.20O
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Flowtech (FLO) Top Chat Posts

Flowtech Daily Update: Flowtech Fluid. is listed in the Alternative Energy sector of the London Stock Exchange with ticker FLO. The last closing price for Flowtech was 117.75p.
Flowtech Fluid. has a 4 week average price of 113p and a 12 week average price of 97p.
The 1 year high share price is 195.50p while the 1 year low share price is currently 97p.
There are currently 60,920,386 shares in issue and the average daily traded volume is 44,320 shares. The market capitalisation of Flowtech Fluid. is £72,495,259.34.
rcturner2: Well I am very pleased that I was able to double up below £1. The share price has overshot on the downside as happens many times when there is a rush of sellers without the necessary buyers to soak up the shares. Long term patience will be rewarded I believe.
theoldcodger: I've been following these for quite a while and have just taken a very small position. Whilst the directors buys are a positive, it actually concerns me that the share price (currently 117) continues to fall even in the wake of these. Shares can also be purchased well inside the spread, thus I expect further share price weakness before any recovery. However, you can't always buy at the bottom and whilst it would probably be better to have waited for some share price strength before starting to buy, I felt it worth a small investment now. My opinions only, TOC
fillspectre: Skyship I don't normally use one bulletin board to cross fertilise others but allow me to shamelessly promote two other shares I have an interest in. Both AIM, both UK manufacturers - neither paying a dividend - one already profitable - one soon to look like it will be I hope. Finally both Rivaldo and Longshanks are interested in these shares and I have found them both to be reasoned individuals with a relatively good eye for potential winners (although I'm not claiming them to be infallible). 1st SDI - AGM tomorrow - Tuesday 25th - a seemingly well run Company with a mix of technical Companies - including scientific instruments, advanced specialist cameras and industrial dosing equipment. Growth is coming both organically and by acquisition - with acquisitions coming via an obvious patient approach - with so far each acquisition looking good business sense - i.e. caution hasn't been thrown away with a need to boost revenue at a certain rate. Growing ever more profitable - in particular I'm awaiting news of increased orders for something called Proreveal - which is a detection device which allows sterilisation units in hospitals to determine how effective their cleaning processes are - each sale leads to repeat revenues of consumables. In theory NHS trusts are compulsed by Government to buy into this sort of technology although the main deadlines have already been passed. No dividend yet but thus far share price growth has more than made for up this. 2nd SCE - Potentially more interesting although for now I would school you to do your own research and possibly play a waiting game. This is a manufacturer of carbon ceramic discs brakes. They are currently equipping what they call the OEM cell 1 - a production line for volume production - in a relatively new factory in Knowsley near Liverpool. They have just announced another six month delay in a September statement although the reaction share price wise has been fairly mooted. They have a smaller production cell which is producing increasing revenues in near OEM sales, retrofit kits and will be used for producing brakes for an Aston Martin supercar. The talk in the September statement is that Aston Martin have opened up talks about further models. Meanwhile in this calendar year SCE should complete product testing for two German OEM companies which will be one of the last hurdles for one or both of these Companies to nominate the Surface Transform brake for incorporation into a new car model. The big news for this share will be when they can actually announce the ink is drying on a volume order for what they call OEM3, OEM5 or both. Personally I think until the Brexit date has been put behind us we won't see such an announcement and for this reason I think the six month delay on final commissioning of OEM cell 1 makes little difference. Meanwhile come Jan 2020 the Company should receive an order to supply an aircraft landing Company with brakes for a U.S. military aircraft - a contract which has been likened to an annuity and which on its own was once claimed (I can't remember if this claim is current) should make the Company break even. I have visited the premises at Knowsley on an investor away day - I'm hoping a fresh invite will be forthcoming soon to allow shareholders to see the progress for themselves. Longshanks, on seeing the first new furnace on that visit, likened it to a machine that could literally spin golden discs or words to that effect - such were feelings on its potential ability to create wealth. I apologise to Flotech Fluidpower shareholders to this diversionary interlude. I am a FLO shareholder - I'll submit a post tomorrow onto this board which gets back to the subject matter at hand - and discuss what I think of FLO's prospects.# Fils
grosvenor: Inv Chronicle Wednesday:- Aim-traded shares in Skelmersdale-based Flowtech Fluidpower (FLO:120p), the UK's leading specialist supplier of technical fluid power products to around 5,000 distributors and resellers, have been marked down by 30 per cent following a modest profit warning yesterday and are back to the 118p level at which I first advised buying ('A fluid performance', 2 Jun 2014). True, total dividends of 21.5p a share paid in the past four years cushion the blow to some extent, but that’s not the point as I was positive on the investment case in early summer when the shares were priced at 159p (‘FlowtechR17;s fluid performance underrated’, 1 Jun 2018). They subsequently hit a high of 195p by the end of that month and shareholders also banked a final payout of 3.85p, so the reversal has been dramatic. It’s also a reversal that is completely overdone for a raft of reasons in my view. Firstly, announcing board room changes at the same time as a profit warning is not ideal, and undoubtedly accentuated the share price slide. Chief executive Sean Fennon, who has held that position since 2009, is retiring for close family reasons from the business at the end of 2018. I can fully understand why he is stepping down and respect why he doesn’t want his personal life broadcast across the media. Bryce Brooks looks an able replacement as chief executive having joined Flowtech as finance director in 2010 and overseen an acquisition strategy that has doubled the company’s operating profits in the past five years. Mr Brooks will be replaced as finance director by Russell Cash who is a former Baker Tilly partner and holds the same position at Manchester-based FRP Advisory LLP. Mr Cash is an interesting appointment as Mr Brooks outlined during our lengthy results call. Flowtech will be pursuing a cash focused strategy to improve return on capital alongside tighter working capital management across its multiple operational businesses. Secondly, the profit warning was not major. Joint house broker Zeus Capital only reined in its 2018 adjusted pre-tax profit estimate by £700,000 to £10.7m on maintained revenue estimates of £107.6m, and clipped its 2019 profit estimate by £1m to £12.1m on forecast revenue of £115m. The other joint broker finnCap has similar estimates which support EPS estimate of 14.9p this year and 16.2p in 2019. The main reason for the downgrade is that analysts at Zeus are factoring in higher operating costs from acquisitions made over the past nine months which has added £2.2m to their previous operating cost estimates this year, and about £2.6m in 2019 to reflect costs incurred to streamline the cost base. Gross margin of 35.5 per cent in the six months to end June 2018 was actually 1.5 percentage points higher than Zeus’ previous estimate. That’s worth noting as the additional gross margin earned is offsetting the higher operating costs. Importantly, revenue estimates have not been trimmed back. Also, analysts have little in the way of cost savings actually embedded in their 2019 assumptions apart from £0.5m of savings already being targeted from an acquisition made in March 2018 (see below). That could prove conservative as acquisitions made have higher cost bases than Flowtech, so there should be savings to be gained in areas such as procurement, back office functions and operational efficiencies. Thirdly, a delay in delivering a £1.5m contract on a Thames Tideway hasn't help sentiment although this is hardly a major bear point. A more cautious tone in the trading outlook may have unsettled investors, and in particular signs of softening of growth prospects within Flowtech’s Power Motions Controls (PMC) business which designs, assembles and supplies engineering components and hydraulic systems so has more project-based work. However, this needs to be put into perspective as PMC only accounted for a third of Flowtech’s first half operating profit, and the much larger and higher margin Flowtechnology distribution business (which has a profit margin three times higher at 19.3 per cent) continues to benefit from positive tailwinds and upside from acquisitions too. Indeed, Beaumanor Engineering, a Leicester-based fluid power equipment distributor has traded strongly since being acquired by Flowtech in March 2018, vindicating the decision to raise £11m at 170p a share in placing to fund the bolt-on deal. In any case, it’s only trading in part of the PMC business that is proving less benign and the contributions from 90 per cent plus of Flowtech’s businesses (by revenues) are highly predictable. One would expect this solidity given that Flowtech’s distribution unit offers over 100,000 individual product lines to more than 80,000 industrial maintenance, repair and overhaul end-users in the UK and Benelux, so has a dominant market position. Fourthly, investors have completely misinterpreted the company’s working capital position and its debtor management. Due to the timing of the acquisition in March, receivables increased sharply from £20.9m at the end of 2017 to £27.2m, and inventories were up by £4.6m to £29m. However, average debtor days actually improved in the six-month period. There is absolutely no issue with late payment of accounts. Mr Brooks confirmed that bad debts account for a miniscule 0.2 per cent of turnover and there has been no change in debtors overdue. Furthermore, receivables have been cut to £26.3m since the end of June. Fifthly, the company’s finances are in actually in good health. Flowtech has a £16m revolving credit facility and £4m senior debt facility, both of which are priced at 2 per cent above LIBOR, and a £5m accordion facility with its lenders. At the end of June 2018, net debt was £18m, so well within these facilities. What has not been disclosed in the interim results, and which I can reveal, is that although net borrowings have been cut from £18m to £17.5m since the end of June 2018, Flowtech has also made £895,000 cash payments to settle the deferred consideration on past acquisitions. Moreover, the year-end net debt figure of £17.6m forecast by both Zeus and finnCap is stated after taking into account a further £2.15m of earn-outs between now and the end of the year. This is well worth noting because it illustrates the highly cash generative nature of the business. It also means that the deferred and contingent liabilities of £5.7m in Flowtech’s balance sheet at the end of June 2018 will be reduced to only £2.65m by the end of the fourth quarter of 2018, so can be easily covered by the operational cash flow from the business. There is absolutely no issue with settling deferred consideration. Sixthly, the board has created the role of group credit manager and made an appointment with the successful applicant due to join Flowtech in the fourth quarter, so expect cash collection rates to improve further and reduce the amount of capital tied up in working capital. This can only improve stock turn and return on invested capital in the business. In terms of cash flow generation, Zeus’ free cash flow estimate of £9.3m for 2019 is actually £400,000 higher than its previous estimate. It is based on £12.5m of operating cash flow less taxation (£2.4m) and interest payments £0.4m). Free cash flow should cover the forecast dividend (6.4p in 2019) almost three times over while offering scope for Flowtech’s board to reduce current net debt of £17.6m by around a fifth by the end of 2019. The fact that earn-outs will be much less next year adds further substance to the scope to reduce debt markedly. The bottom line The combination of boardroom changes, rising inventories and receivables mainly due to the timing of an acquisition, higher debt levels, and a small profit warning have clearly spooked investors, but the reaction has been overly harsh for the reasons I outline above. Ignoring the possibility of earnings growth coming through in 2019, the shares trade on a PE Ratio of 8 for 2018 based on adjusted EPS rising from 14p to 14.9p, and offer a 5 per cent prospective dividend yield based on raised payout of 6.1p a share for the 2018 financial year (the interim payout was hiked by 5 per cent to 2.03p a share, hardly a sign of distress). In my book that’s value. The current valuation is also discounting a dramatic drop off in trading in the next year which is highly unlikely, Brexit or non-Brexit. When the dust settles and investors take into account each of the six factors I have addressed, then I can see scope for Flowtech’s share price to recover most of this week’s share price decline. It may take time, but the high yielding shares have recovery potential at this depressed level. Buy.
edmundshaw: Personally I think the reaction is a bit harsh. Obviously there is (was, now) a growth rating on the shares, but the CFO is still in place, they already have a new CFO and one contract is only marginally material to the profits full year. So we are left with discomfort on Brexit and the vague feeling that something else bad will transpire or growth will stall. Causing a 30% share price collapse!? And now, the yield is 5%!
melody9999: Ok here is another post - to confirm I made an initial investment here today. Nothing wrong with a quiet thread though..... let the company and the share price do the talking.
fillspectre: Boonkoh no sooner wished for and the share price has moved up nicely today and the spread has narrowed (according to my limited information). Do you think the market cap going past the 100 million mark may be helping to draw some institutions in? Especially with the not unreasonable but affordable dividend yield and the recent commitment for a period of consolidation? I feel the consolidation statement is possibly the Management putting their reputation for organic growth on the line. They have something to prove now over the next set of quarters. The next trading statement is also likely to raise some comment from Simon Thompson. Fils
fillspectre: I posted onto this board yesterday - but for some reason when I look at the bulletin board on my mobile - my latest post does not come up - I'm still seeing WereWolfie's 14th November post as the latest post. This is a very quiet board!! Looks like a little bit of interest stirring into the Flotech Fluidpower share price at the beginning of 2018. We must be only about three weeks from a January trading statement if 2018 emulates 2017. I wonder if Simon Thompson will reiterate a buy tip this year? Fils
edmundshaw: Thanks for that. Easy to miss a late afternoon RNS like that! Looks a sensibly priced acquisition. All the right noises from both managements, so reasons to be cheerful! Meanwhile, would the Board of Flowtech "remain very encouraged about the future" if they were about to give us bad news? That would be poor form and would hurt their reputation and share price for some time, and this management are too smart to make that blunder, so I think we can read into that that the results next week are set to be at least in line with expectations. Which are pretty decent.
paleje: This was ST's view on the profit warning aspect, no guarantee of course:- Major profit warnings failed to materialise Firstly, the sharp share price derating since early June largely reflects investors’ expectations that Flowtech’s financial performance would mirror the 6 per cent revenue decline across the industry in the first five months of this year based on industry data from The British Fluid Power Distributors Association. In other words, investors were expecting a major profit warning. In the event, Flowtech’s underlying revenues were actually flat in the six month period if you strip out the impact of earnings accretive acquisitions which lifted revenues by 28 per cent to £27.4m. That’s not to say that the business has been entirely insulated from the softer general market backdrop. It clearly hasn’t and increasing market weakness in the last few weeks has led Flowtech’s board to guide analysts down in their profit forecast, but only modestly so. In fact, Andy Hanson at brokerage Zeus Capital trimmed his full-year revenue forecast by only £800,000 to £53.9m, implying that Flowtech will still post top-line growth in the order of 20 per cent in 2016. Admittedly, a 0.6 percentage point reduction in trading margins to 14.9 per cent means that pre-tax profits estimates have been reduced from £8.1m to £7.6m, but that still represents 13 per cent year-on-year growth and that’s enough to drive EPS up by around almost 15 per cent to 14.2p. It also supports a 5 per cent hike in the dividend per share to 5.5p as analysts predict. On this basis, Flowtech’s shares are being rated on 7.2 times earnings estimates and offer a prospective dividend yield of 5.3 per cent. Zeus Capital is the house broker, but its EPS and dividend estimates also mirror those of analyst David Buxton at broking house finnCap. Another issue that is likely to have concerned investors is the sharp fall in sterling post the EU Referendum. That’s because between 30 to 40 per cent of Flowtech’s UK purchasing is denominated in foreign currency, so the 15 per cent plus decline in sterling against the euro and US dollar in the past 12 month is expected to have an impact. Bearing this in mind, I understand that Flowtech’s board took the shrewd decision to make significant inventory purchases in China ahead of the EU Referendum, thus gaining better pricing from Chinese suppliers before sterling started to weaken. This pre-emptive move has insulated the business from margin pressure near term. I would also flag up that in previous periods of sterling weakness, most notably in 2009 to 2010, Flowtech was able to maintain margins by passing on price increases to customers, reflecting the strength of its business model. For instance, a plumber who needs a part urgently to complete a job is unlikely to baulk at paying a few extra pounds for it if delivery is guaranteed the next day as the extra cost is relatively insignificant to the daily labour cost being billed to the client. I strongly feel that investors have overreacted to the impact of sterling’s weakness on Flowtech’s business, and underestimated the ability of management to pass on higher wholesale costs to end users
Flowtech share price data is direct from the London Stock Exchange
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