AIM listed specialist technical fluid power products supplier Flowtech Fluidpower (LON: FLO), issued the following unaudited Q3 Trading Update for the nine-month financial reporting period ended 30 September 2018:
GROUP TRADING UPDATE AND FINANCIALS
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Revenue for the nine-month period ended 30 September 2018 |
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Divisions: |
YTD 2018 Unaudited £’m |
YTD 2017 Unaudited £’m |
Growth |
|
Flowtechnology |
34.8 |
28.3 |
23% |
|
Power Motion Control (PMC) |
42.9 |
21.7 |
98% |
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Process |
6.0 |
4.5 |
33% |
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Total Group revenue for the period |
83.7 |
54. 5 |
54% |
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Net debt |
17.6 |
12.1 |
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Group revenue during the first nine months of the current financial year increased by 54%, of which 6.7% was organic with the balance coming from operations acquired in the reporting periods.
Since reporting our HY1 2018 results and market update in September the business has experienced a solid trading period which remains in line with market expectations. Gross margins also remain in line with previous reports. Trading from the Profit Centres acquired as part of the Balu acquisition in March, being Beaumanor Fluidpower and Derek Lane, continues to be in line with the plan outlined at the time of the acquisition and the outlook for both as part of the Group’s efforts to extract synergy benefits remains good.
Net debt at 30 September 2018 was £17.6m. Net cashflow from operating activities in the quarter to 30 September 2018 was +£4.1m (2017: +£1.4m), which was also in line with expectations.
PEOPLE
The Board looks forward to Russell Cash taking up his position of Chief Financial Officer on 1 November. Working with the management team, his focus will be to optimise cash generation and extract the operational cost efficiencies available following the strong acquisitive and organic growth seen in recent months.
OUTLOOK
As previously reported, the buoyant conditions seen in the first half have now given way to a steadier pace of growth. The Board remains positive, although cautious, about overall growth rates for the fluid power market as we move into 2019, and this view is supported by the very broad spread of sectors within the Group’s customer portfolio, both in the UK, and its euro-based operations.
Regarding the order for c.£1.5m to design, manufacture and supply hydraulic cylinders and power units to an appointed sub-contractor on the Thames Tideway project, reported last month, the Board is pleased to confirm that a return to positive progress has been made. A further update will be given in the full year trading update in January 2019.
SUMMARY
The Group is expected to deliver another year of positive progress. Whilst the scope for significant growth by acquisitive means remains compelling, our short-term focus is firmly on management actions and investment that can deliver sustained operational improvements, procurement benefits and wider Group synergies. Overall, the Board remains confident in the Group’s strategy and the outlook for future growth remains strong.
INTERIM DIVIDEND
As previously announced, the half-year dividend of 2.03p will be paid on 26 October 2018, to those members who were on the register at close of business on 28 September 2018.
