Flowtech Fluidpower Plc

0.00 (0.0%)
Share Name Share Symbol Market Type Share ISIN Share Description
Flowtech Fluidpower Plc LSE:FLO London Ordinary Share GB00BM4NR742 ORD 50P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 108.25 9,524 10:21:04
Bid Price Offer Price High Price Low Price Open Price
105.50 111.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Fluid Powr Cylindrs,actuatrs 114.77 -6.25 -10.20 - 66.57
Last Trade Time Trade Type Trade Size Trade Price Currency
14:21:34 O 27 107.48 GBX

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Date Time Title Posts
17/4/202311:03Flowtech Fluidpower820
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Posted at 12/4/2023 09:01 by sharw
Agreed - the worst bit is that I can see the consensus forecast eps elsewhere but these are adjusted and the FLO report does not give adjusted. All I can find is the basic figure which is negative because of the massive £10m write-off of goodwill. We do get a detailed account of the changes of discount rate causing that!
Posted at 30/3/2023 13:39 by edmundshaw
Thanks, Boadicea. I just forgot to update my results schedule, I did see that RNS earlier... The important line in that RNS was "The Board confirms that the underlying profit for the year ended 31 December 2022 remains in line with market expectations", together with the absence of any specific warnings.

Anyway, as I had taken some profits at 150p in 2021 and not replaced the shares on the drop in 2022, I was comfortable to topped up again at 97p, which I think is probably a good price.

I actively manage my exposure to my different shareholdings, so rises and falls do present opportunities to take profits and reinvest, which on average I find beneficial...

Posted at 28/3/2023 16:02 by boadicea
Edmund - I think you need to read this -

In fact audit delays are commopnplace at present and other companies I hold have had them. So far it has not been a forewarning of any problem apart from lack of audit manpower. One company was confident enough to publish its preliminary results unaudited. The audited version duly followed without material alteration to the bottom line

Posted at 24/3/2023 08:31 by 1milliejade
Now that's always a good sign isn't it ?. Auditors asking for more time is akin to a Football Club Chairman expressing full confidence in the Manager, and we all know how that ends don't we ?.

PS Have you seen the share price graph performance since Feb ?. I am going giddy just looking at it.

Posted at 23/3/2023 10:18 by 1milliejade
As prev predicted, now BELOW £1
,THIS is below the float price of 9 yrs ago, is this a record ?.

Posted at 06/2/2023 13:40 by cerrito
The Odyssean manager was on thr vox markets podcast the other day going through his holdings.
His main comment about FLO was the small free float given the shareholder base and was pleased that they had avoided havingto do an Equity raise during Covid.
Agree with you on McDowell.
I top upped a couple of weeks back and was thinking of doing more but perhaps too late.

Posted at 10/10/2022 22:54 by edmundshaw
MJ, lots of companies have lost out in share price recently. This one has been remarkably stable I think, lately. When there is news that is when I will re-evaluate. Warren Buffett stated that “in the short run, the market is a voting machine but in the long run, it is a weighing machine,” I will weigh up the evidence when there is some...

FWIW I sold a fair few around 120p and 150p, so am somewhat underweight here. I will add later IF I see deeper value after news.

Posted at 10/10/2022 18:51 by 1milliejade
Edmundshaw was quite bullish a while ago, l trust he is content with the continuing slow but persistent share price decline. I recommended getting out at a higher price, now down further to 102p so some of you are no doubt congratulating yourselves at dropping stock. I explained there might be a bottom below 100p which is likely soon.
You can't keep a business strategy of increase stock, then reduce stock, then increase stock then reduce it again and expect success. Reminds me of the old hokey cokey !!.
This management being really proactive and on the ball as apigeon puts it, is the same crew who have seen the share price collapse over recent yrs !. Can't resist that scenario is definitely one for the birds, or he is out on a wing and a prayer.

Posted at 07/3/2022 09:22 by ashleyjv

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

Notice of Annual Results


IMC Investor Presentation

AIM listed specialist technical fluid power products supplier Flowtech Fluidpower plc (LSE: symbol FLO), is scheduled to release its Annual Results for the year ended 31 December 2021 on Tuesday, 29 March 2022.

The Company is also planning to hold a 'live' presentation which will be hosted by CEO Bryce Brooks, and CFO Russell Cash via the Investor Meet Company platform on the day at 9.00am.

Investors can sign up to Investor Meet Company for free and add to meet Flowtech Fluidpower plc via :


Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9.00am the day before the meeting or at any time during the presentation.

Investors who already follow Flowtech Fluidpower plc on the Investor Meet Company platform will automatically receive an invitation to join the event.

Posted at 21/9/2018 08:26 by 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.

Flowtech Fluidpower share price data is direct from the London Stock Exchange
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