Flowtech Fluidpower Share Discussion Threads

[werewolfie] 02/11/2017 15:18

Just dropped 7p?

[fillipe] 27/10/2017 15:21

Stonkingly good write-up on FLO in today's paper IC.

f

[kevph] 23/10/2017 13:16

Thanks alter ego. Wondered what was going on.

[alter ego] 23/10/2017 13:03

just tipped by Simon Thompson in the iC.

summary:

I am therefore upgrading my target price to 192p, representing 12 times earnings estimates for the 2018 financial year, after taking into account last week’s earnings upgrades, and the ongoing derisking of the cyclical nature of the business, which makes the earnings stream more stable and valuable for investors. Buy.

[davebowler] 17/10/2017 09:50

FinnCap;

The group’s Q3 update confirms trading remains in line with expectations, with a strong level of organic growth boosted by recent acquisitions. No change to forecasts, having been upgraded for the recent acquisition of HES. The shares remain at a deep discount to its peer average, with potential upside to EPS from further expected acquisitions. Our target price of 205p indicates significant upside.

[edmundshaw] 12/10/2017 08:15

Useful. And another announcement - on trading - next week.

[douglas fir] 12/10/2017 07:25

NEWS RELEASE

Issued on behalf of Flowtech Fluidpower PLC

Immediate Release











FLOWTECH FLUIDPOWER PLC

("Flowtech" the "Group" or "Company")



Acquisition of Group HES Ltd further strengthens UK presence

and

Onsite Services Division to be established in 2018





London: Thursday, 12 October 2017: AIM listed specialist technical fluid power products supplier Flowtech Fluidpower plc (LSE: AiM: symbol: FLO) is pleased to announce the further strengthening of its Power Motion Control (PMC) division through the acquisition of Group HES Ltd ("HES") (www.grouphes.com).



Background to the Acquisition

Founded in 1965 and, today headquartered in Gloucester, England, HES is a multi-faceted solutions provider to the Fluidpower sector. HES employs 89 people across is network of branches located in Birmingham, Durham, Gloucester and Leeds. The business operates under five trading brands: Hydraulic Equipment Supermarkets; Branch Hydraulic Systems, and more recently established specialist distributor brands in HES Tractec, HES Lubemec and HES Automatec.



The acquisition provides another complementary business to the Group's PMC division, delivering incremental revenue through a mix of wider technical applications, reinforces our offer to the off-highway market and adds aerospace to our sector coverage. In addition, the acquisition extends Flowtech's position with important global suppliers, including Danfoss Power Solutions (www.powersolutions.danfoss.com).



HES will operate within the PMC division and continue to be managed by the current senior management team. Previous owner and Managing Director, Stuart Diesel, who has been with the business for over 20 years will remain with the HES business during a transition period, and in 2018 he will then take up a new role as Divisional Managing Director - Onsite Services. Working with the existing resources available within the PMC and Flowtechnology operations Stuart will build this new division within the Flowtech Group. The launch of this new division represents the final element of the multi-channel strategy outlined at the time of the Group's IPO in 2014.

For the year ended 30 June 2017, HES achieved sales of £10.0 million producing adjusted EBIT of £0.7 million. Net assets excluding Net Debt at the same date were £3.0 million.

Unaudited Net Debt at 30 September was £0.75 million, which includes c.£0.5m relating to a large project currently being installed with the contractor, Galliford Try, on behalf of Airbus in the UK. Following completion of this contract Net Debt is expected to return to a "normalised" level of c.£0.1 million by 31 December 2017.

The Group expects to deliver synergy opportunities over the short and medium term through coordinated operational, procurement and back office activities.

Purchase Consideration

The consideration of £4.1 million is to be satisfied as to £3.1 million in cash on completion, and the balance of £1.0 million by the allotment of 661,805 new ordinary shares in Flowtech (the "Consideration Shares") to Stuart Diesel.



The Consideration Shares have been credited as fully paid and will rank pari passu in all respects with the existing ordinary shares in the capital of the Company in issue, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the shares. Application has been made for the Consideration Shares to be admitted to trading on AIM and it is expected that admission will become effective and that dealings will occur on or around 18 October 2017 ("Admission"). The vendor has agreed not to dispose of any of the Consideration Shares for a period of 12 months (except under limited circumstances with the approval of the Board) from completion and thereafter orderly market arrangements for a further period of 12 months.

Sean Fennon, Chief Executive, Flowtech Fluidpower plc commented:



"We are delighted to add the technical skills and knowledge of this long-established business to the Group; HES adds new brands and sectors to our portfolio; it also gives us the opportunity to build our fourth leg in technical maintenance which enhances our overall service offering to our customer network. This move clearly reinforces our 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."



Stuart Diesel, former owner and Managing Director of Group HES added:



"The opportunity to join Flowtech as it rolls out an exciting Group strategy was instrumental in my decision to sell the business. This change also considerably enhances several aspects of our HES business and offers new and exciting prospects for all our employees. My team and I are looking forward to being part of this industry respected business - we recognise that the strategy and the resources available to us opens up new prospects and makes it possible to attain significant growth beyond what was achievable as an independent business."



Summary and Notice of Q3 Trading Update

The Board of Flowtech remain very encouraged about the future and remain confident that the Group's current performance will deliver another year of solid progress. As a business, it is confident in its strategy, commercial opportunities and the prospects of the Group.



Flowtech will be releasing its Q3 Trading Update on Tuesday 17 October 2017.

[petewy] 11/10/2017 14:01

Now we're trucking..

[fillipe] 22/9/2017 16:13

154p at the ask....quite nice.

f

[boonkoh] 22/9/2017 10:47

Looks like an overhang cleared? Good to see FLO on the move upwards and breaking out.

[fillipe] 22/9/2017 09:48

Lively and nicely up again today.
Looking firm on the bid.

f

[edmundshaw] 12/9/2017 14:27

Too early to tell. They talk of synergies and cross-selling, and they are maintaining margins in a difficult market. We shall see. But certainly acquisitions caome with various short term costs.

[rcturner2] 12/9/2017 13:20

This looks like a company on the acquisition trail to boost the top line all the while the bottom line is going nowhere.

[petewy] 12/9/2017 12:06

yes. I'm watching carefully. The divi keeps me happy.

[thaiger] 12/9/2017 11:36

Your opinion obviously differed to the broker!

[rcturner2] 12/9/2017 08:52

I have sold out, poor results in my opinion.

[davebowler] 12/9/2017 08:50

Finncap;  Interim results show a strong increase, with trading on track to achieve our full-year forecasts. While acquisitions have contributed much of the growth, pricing increases have largely recovered margins to pre-Brexit levels. The recent acquisition of Hydroflex illustrates the ongoing build-out strategy and the expectation of stronger trading in H2. No change to forecasts, having adjusted for the Hydroflex acquisition. The shares remain attractive, trading on a significant discount to distributor peers. We reiterate our 192p price target based on a target P/E of 12.6x, which –together with further earnings accretive acquisitions – highlights the considerable potential upside to the shares over the next year.

[alter ego] 12/9/2017 08:33

9p?

"The Board is therefore pleased to declare a half-year dividend of 1.93p (2016: 1.84p), a 5% increase."

[petewy] 12/9/2017 08:04

Strange title for results: Organic & acquisition strategy underpins future.
Preparing for growth seems about right. Divi up 0.9p

[petewy] 10/9/2017 22:36

Interim Results Tuesday

[petewy] 08/9/2017 22:39

Flowtech Fluidpo had its price target raised by analysts at FinnCap from £1.82 to £1.92 ($2.48). They now have a "corporate" rating on the stock.

[edmundshaw] 07/9/2017 18:41

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.

[boonkoh] 07/9/2017 16:22

Included in the acquisition statement today: "In summary, the Board of Flowtech remain very encouraged about the future. The Group will be releasing its Half Year results for the period ended June 2017 on, Tuesday 12 September."

[edmundshaw] 29/7/2017 14:35

Hm, thanks bb; but that list omits my holding for some reason... :-)