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
  -0.75 -0.72% 102.75 82,568 16:35:20
Bid Price Offer Price High Price Low Price Open Price
102.50 103.00 103.00 102.00 102.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Alternative Energy 111.05 6.92 8.34 12.3 63
Last Trade Time Trade Type Trade Size Trade Price Currency
16:29:39 AT 1,000 103.00 GBX

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Date Time Title Posts
18/1/202012:37Flowtech Fluidpower551
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 Fluidpower Daily Update: Flowtech Fluidpower Plc is listed in the Alternative Energy sector of the London Stock Exchange with ticker FLO. The last closing price for Flowtech Fluidpower was 103.50p.
Flowtech Fluidpower Plc has a 4 week average price of 94.40p and a 12 week average price of 94.40p.
The 1 year high share price is 150p while the 1 year low share price is currently 94.40p.
There are currently 61,157,127 shares in issue and the average daily traded volume is 70,467 shares. The market capitalisation of Flowtech Fluidpower Plc is £62,838,947.99.
fillspectre: The average daily volume seems to be creeping up and the share price stabilising. I take comfort from Russell Cash's share purchase back in late Sept. Still quite a bit to go before the Jan trading update. Fils
fillspectre: The share price is all over the place at present. I thought I saw two chunky buys of over £100K a piece at 118p a share on Monday though. Fils
fillspectre: Thanks shaker44. The way I see it - it is a lot easier to load up on shareholders' equity and go on a spending spree. Whilst this is happening some commentators cotton on to the fact that outwardly it is a great growth story. The share is recommended and the price increases. Then the music stops. It is revealed the purchases weren't quite as keen and well researched as previously made out. The person leading the buying frequently disappears as they don't necessarily want to be pinned back to doing the assimilation and finding the cost savings that will turn the enlarged business profitable. Others more suited or more willing take over the reins and start the hard business of running the business as well as they can. The story isn't as compelling and interest is lost. Which is the better investment? Difficult to say - if you can ride the upwave and get out near the top from a purely share price view it has to be the former. If you want to ensure you invest in a business that may have a long term future and may put a floor under the share price with actual profits - could be the latter. Fils
fillspectre: The share price seems to be recovering nicely in July towards the May highs of 148p which were reached before the ex-div day of the 6th June. Fils
fillspectre: I'm thinking the same thing as you guys. Unless something has substantially materially changed the July trading statement should confirm we are at least meeting expectations plus we are going to get paid 4.04 per share on Friday for those holding on when the share went ex-divi. I'm also expecting the trading statement to confirm some more debt has been paid off and the working capital position has been improved. Fils. PS Redsquirrel13 did you take a look at SCE - the longstanding ADVFN board members are getting excited after a recent RNS posted 28th June and share price starting to move out of the doldrums.
fillspectre: I'm beginning to think everyone has decided to go away in May. Share volumes down across many shares I'm watching including this one and SDI. However the FLO share price is holding up - I'm still convinced there is a floor at 135p due an institution being interested. Is anyone tempted by the AGM in Wilmslow on the 5th June. One of the votes it to accept the dividend and if that passes which I'm sure it will the share goes ex-dividend the next day for 4.04p. Fils
fillspectre: Early evening RNS letting us know that Odyssean Investment Trust PLC has acquired approx. another 584K of shares or nearly 1% of Flowtech Fluidpower stock to lift their total position to 7.21%. I'm guessing another institution has correspondingly decreased its position but still good news. My personal take on Flotech - the previous CEO took us on a long run of acquisitions but he might have left us in a better shape to "harvest the synergies" before he went. I do wonder about how well he drove a bargain over purchase prices - especially in the latter acquisitions. The new CEO and CFO are busy addressing this shortfall. I hope they retain or increase this modest organic growth rate, just keep new acquisition targets warmed up for now (I mirror the CEO's own words)and look at all times for ways they can increase profits by either identifying and exploiting cost savings, increased cross selling or developing in-house with own resources new opportunities. As soon as the general market feels like they are on the right track the dividend yield should reduce to around 3.5% because of a share price rise. Fils.
camerongd53: n September this share was trading @approx 170p. A couple of issues appeared and the price dropped to approx 120p. The issues highlighted do not appear to have affected the profitability as profitability appears relatively unchanged. Expectation of growth in profis may have dropped but should that explain why the share price is still down by a third. I anticipate that profit growth may return. General market sentiment may improve and if it does together with profit growth, the share price could easily double + over a few years. I know there are ifs in what I said but they are not the most remote. This could be a low risk long term buy at todays price
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.
Flowtech Fluidpower share price data is direct from the London Stock Exchange
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