 Another FLO aquisition, from FLO's linkedin feed :-
>>>>>>>>>>>>>>>>>>>>>>>>>>
We are delighted to announce that as from today, ALLSWAGE UK is now part of Flowtech.
This partnership aligns incredibly well with our strategy and brings together our collective capabilities, building further on our end-to-end service solutions.
Allswage is a hydraulic hose assembly equipment specialist based in West Bromwich, UK. With over 40 years of experience, Allswage specialise in swaging and industrial hydraulic hose machinery, mobile and container workshops, as well as off-the-shelf van racking. On top of this, they offer spares, accessories, service and support to their customers across the UK and Ireland.
This is an exciting opportunity for us to further enhance our service offering and we are delighted to welcome the Allswage team to Flowtech.
Added later :-
Allswage web site (presumably to be absorbed into Flowtech website)
Announcement on Flowtech website :-
Looks like a smaller addition, but could be useful in expanding range and for cross selling purposes. |
The UK economy was weak and Rachel made it worse.
The Labour party has concentrated on renewables and infrastructure while ignoring the larger economy. Unfortunately that is not good enough for overall growth and the government now has a funding black hole that it needs to fill.
Thus, markets are apprehensive, FLO is in turnaround, but revenue was down by 4.3% and
debt up by £0.4 million in full year update.
Thus, with economic headwinds persisting the markets do not appear to have much enthusiasm for FLO.
UK industry is struggling to survive, but not receiving much help from government.
Some sectors like Chemicals do look like they may not survive. |
is uk industry going the way of the dodo? |
Well 0.25% interest rate cut today should help a little to pay a little bit of the Employers NI tax hikes.
BBC pundits seemed to think there might be as many as 4 interest cuts this year although J P Morgan are predicting 6 cuts this year.
Times yesterday was saying Rachel will need to raise taxes and/or make cuts to fill the hole in finances due to lack of growth and higher interest rates UK gov. is paying due to lack of confidence in economic policey. |
Vox Markets - 31/1/25:
The Exchange with Richard Staveley of Harwood Capital
47:25 Flowtech Fluidpower |
Panmure - 30/1/25:
We cut FY24E EBITDA by 13% and FY25E by 15%, but there is some positive momentum in the pipeline and operational improvements mean that Flowtech is well positioned to leverage a market recovery when it comes.
We estimate FY24E net debt/EBITDA of 2.4x (ex leases), versus a covenant that has been relaxed from 2.5x to 3.0x, so there is sufficient headroom. We see net debt/EBITDA falling to 1.9x in FY25E. |
Trading update pretty much as expected showing a decline in revenues due to economic headwinds, but Thorite Group going well and digital platform on track.
The hope is for better days ahead even in an environment of economic headwinds. |
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. |
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