Over the last 2/3 years,I have been long and wrong here.
Despite the low share price, I am reluctant buy more, even given the good reputation of management and the BOD.
I go on the basis that demand for FLO products still sticky.
Note to self: at the next IMC type event I need to ask how much of their market is routine maintenance and how much new build/major refurbishment.
I note trading volumes are not abnormal by historic FLO standards. |
Trading update should probably come out next week if in line with previous years.
Looks like the market is jumpy on FLO, the company appears to be making progress, but then again the global economy is not exactly robust and Rachel Reeves and co have given the UK economy a hammering. |
Yes, I've traded this one, but have been accumulating on a medium term view.
The new management look capable.
The e-commerce system only scheduled for launch in Q1 2025.
The acquisition of Thorite Group out of administration was a steal. |
One to lock away until actual results visible from new management, I feel. |
 From Rockwood Strategic interims :-
Flowtech Fluidpower Plc (Fluidpower component distribution and manufacture): Interim results were released in September which highlighted underlying progress under the new management team offset by challenging trading conditions. Sales fell by 5.7%, however gross margins have started improving due to pricing and sourcing initiatives. Net debt also fell as inventories were reduced. There has been huge (60%) change of senior management under the new CEO, the disparate brands were only unified under Flowtech in June and the much needed new e-commerce system only scheduled for launch in Q1 2025. Service complaints have halved, operational headcount cut by 25%. External factors thus distracted from an emergent, highly motivated team. A sign of the entrepreneurship we were eventually anticipating emerged in the announcement of an opportunistic acquisition of Thorite Group out of administration for almost no cash outlay. The business has been generating more than £20m in sales and has clear synergies with the rest of Flowtech. We expect a positive impact in 2025 as the business and its assets are integrated with the potential to enhance shareholder value considerably. We commenced buying Flowtech Fluidpower for the strategy in May 2020 at 70p. It closed the period at 90p and has an extended length investment thesis due to the need for a management reset, which was achieved in April 2023. On current market expectations, the shares were valued on an EV/Ebitda of 7x for their financial year 2025, at period end. |
Estimates going in the right direction.
However, it is one for the patient. |
Panmure - 26/9/24:
EPS
-24: 2.2p
-25: 6.5p
-26: 9.3p
Net Debt
-24: 14m
-25: 11.5m
-26: 7.9m |
Market reaction looks overdone to me. The question I would have is whether they are losing out to competitors (serious) or merely a turn-down in the industry (destocking etc) which is likely to be temporary. |
Looks massively oversold on disappointing results surely? |
Odyssean did not reduce to 16.5%. It was reduced to 16.5% due to the exercise of options by Zeus capital. |
Yes appears prima facie to be good news but too bad they have to emphasize once again the continued strong market headwinds and indeed I wonder if the situation is the same in the UK(£79m of sales in 2023) as in Ireland-£22m and Benelux-£10m 2023 sales respectively.
Featured at the end of the Paul Hill interview with Odyessean,who a couple of months back reduced to 16.5%, a few weeks ago. |
It looks like a very sensible deal overall given the turnover, debtor book and potential for cost savings etc. But I guess we won't really know how it's even beginning playing out until next year's finals (end March) - and (more realistically) next year's interims.
I guess they'll shed a little more light on the rationale with the interims two weeks today. |
Thorite was struggling with its debt, as op profit was essentially zero (negligible) with current trading headwinds.
Assuming the acquird debt servicing is outweighed by the opportunities for synergies (management reduction and geographical overlaps for an easy start) plus future better trading conditions, this ought to be a useful acquisition. I have no idea how cross selling opportunities will work, though... |
 Looks like a bargain, if they can turn it around.
"Under the terms of the Acquisition, Flowtech will acquire all the plant and machinery, vehicles, stocks, and intangible assets of Thorite for a total cash consideration of £350,000 which will be funded from the Group's existing bank facilities.
Flowtech has also repaid Thorite's outstanding debtor finance facility of c.£1.7m in return for an assignment to the Group of a debtor book totalling c.£2.6m; this has also been funded from the Group's bank facilities. A sharing arrangement relating to the excess of debtor book recoveries over and above the c.£1.7m paid has been agreed with the Administrator of Thorite.
In the audited accounts for the year ended 31 March 2023, Thorite generated revenue of £21.2m and delivered an operating profit of £79,000. The gross value of asset classes being acquired at the same date was £8.8m, inclusive of £3.8m in respect of the debtor book at that point in time. Thorite has since experienced cash flow challenges and incurred operating losses due to a combination of internal issues and market headwinds. Thorite's operating losses in the year to 31 March 2024 are estimated at £1.2m.
Through a combination of the strategic benefits and synergies already identified, the Board expects profitability to be restored in the first full year of ownership with the associated benefits to Group earnings." |
Picnic
Agreed my mistake, misread it. |
Do not think OIT have sold.just the dilution effect of those 1.2m shares issued to
Zeus capital for those warrants. |
Some more meaty trades, this time @1.06.
Just had a closer look at the OIT tender, should not be a overhang of shares as
"matching facility....any shares tendered to be matched with buying interest to
ameliorate a shrinking of OIT" |
There was around 1m traded at the end of last week at £1.10.sounds as it could be the end of the Downing holding.
I note today that Odyssean IT has announced a tender offer.They hold 17.08% of FLO.
potential overhang ? |
I would have hoped anybody wanting to buy Flotech would have made a move by now for the downing shares
I was hopeful that there would be a bid, but that is looking more remote now |
boadicea
24 Apr '24 - 15:48 - 864 of 864
Agreed!
f |
One wouldn't expect the share price to increase by 40% over a month without good reason. While the reults provided some optimistic noises (when don't they!) this is virtually the only share I hold where the FLOw of optimism has not ebbed beyong recall within days under current market conditions unless backed by hard figures.
So my odds on conclusion has to be that something is afoot. |
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