TIDMFLO
RNS Number : 2253U
Flowtech Fluidpower PLC
28 July 2020
NEWS RELEASE
Issued on behalf of Flowtech Fluidpower
plc
Immediate Release
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
FLOWTECH FLUIDPOWER PLC
("Flowtech Fluidpower", the "Group" or "Company")
Group Trading Update, Board Changes
and
Notice of Half-year Results
"We are delighted with the way we have reacted to the unforeseen
and unprecedented challenges presented by COVID-19. Improved
trading as markets recover, combined with our focus on
restructuring and cost saving initiatives, should result in a
profitable and cash generative second half of 2020"
London: Tuesday, 28 July 2020: AIM listed specialist technical
fluid power products supplier Flowtech Fluidpower plc (LSE: symbol
FLO) , announces the following unaudited trading update on its
performance for the six-month financial reporting period ended 30
June 2020
COVID-19
Since the onset of the COVID-19 lockdown we have prioritised the
health and wellbeing of our people, while maintaining a full
service to our customer base. We are extremely grateful to all our
employees for the resilience and adaptability they have shown in
the face of this adversity.
GROUP Trading Update AND FINANCIALS
HY1 2020 HY1 2019 FY 2019 Change
Unaudited Unaudited Audited H1 2020
GBP'm GBP'm GBP'm v H1 2019
----------- ----------- ----------
Divisional revenue:
Components 39.1 51.2 96.3 (23.6%)
Services 7.5 8.4 16.1 (11.0%)
Total Group revenue for
the period 46.6 59.6 112.4 (21.8%)
----------- ----------- ----------
Net debt 14.6* 18.8 16.6
------------------------- ----------- ----------- ---------- -----------
* Excludes IFRS16 related debt but including c.GBP1.6m (2019:
GBPNIL) of deferred VAT linked to Government COVID related support
schemes.
Revenue for the six-month period to June 2020 was down GBP13.0m,
or 22% on a like for like trading day basis. Q2 was the most
materially affected by COVID-19, down 33% against prior year.
April's revenue was the most impacted, down 41% on a like-for-like
basis, as a large proportion of our customers were closed. However,
we are pleased to report their gradual return resulted in an
improving trend, with the like-for-like revenue down 34% and 25% in
May and June, respectively.
All our key customers have now returned, our supply chain is
functioning effectively, and the trends remain encouraging, with
July revenue approximately 15% ahead of the same point in June. As
a result, we have welcomed back a number of UK furloughed employees
and now have only 43 furloughed compared with a peak of 189 in
April.
NET DEBT/BANKING FACILITIES
We continue to focus on all areas of working capital management
to ensure our cash position remains well controlled, and net debt
at 30 June 2020 was GBP14.6m. This represents a GBP1.0m reduction
from the position at 31 March 2020, GBP2.0m from the 31 December
2019, and GBP4.2m over the last 12 months. There is no outstanding
deferred consideration in respect of our historic acquisition
activity.
In line with the normal course of business we entered into
discussions with our Bank regarding the extension of facilities.
The Bank has recently approved the continuation of our aggregate
GBP25m of facilities and this is in the process of being
documented.
RESTRUCTURING/COST REDUCTION ACTIVITIES
We went into this crisis part way through a significant
programme of rationalisation and streamlining. We have previously
reported anticipated annualised savings of GBP1.6m and are pleased
that execution remains on track. In addition, we have commenced
further restructuring activities, including some redundancies and
anticipate the aggregate impact of this will lead to further
annualised savings of c.GBP1.0m. Activity in Ireland has been
slightly delayed in order to undertake a broader exercise which is
expected to deliver significant benefits. Whilst the overall annual
cost savings have increased, the estimated benefit (excluding
implementation costs) to our 2020 performance remains unchanged at
GBP0.8m.
SUMMARY & OUTLOOK
We reacted quickly to the unforeseen demands caused by COVID-19
and managed our trading and cash performance effectively. Entering
the second half of the year we look forward to improving trading
conditions. This coupled with our ongoing restructuring activities,
should result in a profitable and cash generative second half of
2020.
While the threat of further disruption remains real, we consider
it prudent to make no further commitments towards reinstating the
dividend. We recognise the importance of this income to our
shareholders but wish to retain the cash in the business until the
outlook is clearer. For similar reasons, we have no immediate plans
to reinstate formal earnings guidance.
BOARD CHANGES
As outlined in the announcement dated 27 March 2020, the Company
had commenced a search for a new Non-Executive Director. The Board
is pleased to announce that the result of this search is the
appointment of Paul Gedman as Non-Executive Director with immediate
effect. Paul will sit as a member of all Board Committees.
Paul has extensive experience in the global ecommerce industry
having held positions that included CEO of the Beauty, Wellness and
Luxury Divisions at the Hut Group for over eight years. Prior to
this, Paul held the role of Head of Online at Littlewoods Clearance
(part of the Shop Direct Group). Paul brings with him a wealth of
knowledge in growing international businesses through leveraging
ecommerce and digital capabilities. The Board feel this experience
will bring additional skills which can serve to benefit the
Company's e-business operation, in turn expanding our
online-presence and cross-border selling opportunities, placing us
at the forefront of the sector as a progressive industrial
distributor.
As announced on 12 May 2020, the Company confirms that as at 1
August 2020, Roger McDowell will be appointed Non-Executive
Chairman with the current Non-Executive Chairman Malcolm Diamond
MBE retiring from the Board. We would like to sincerely thank
Malcolm for the huge contribution he has provided over the last six
years.
The Board will then comprise Roger McDowell (Non-Executive
Chairman), Bryce Brooks (Chief Executive Officer), Russell Cash
(Chief Financial Officer), Nigel Richens and Paul Gedman
(Non-Executive Directors).
NOTICE OF RESULTS
The Group is planning to release its Half-year results for the
period ended 30 June 2020 on Tuesday, 8 September. The announcement
will be available to view and download from the Company's website
www.flowtechfluidpower.com .
Enquiries:
FLOWTECH FLUIDPOWER PLC
Bryce Brooks, Chief Executive
Russell Cash, Chief Financial Officer
Tel: +44 (0) 1695 52796
Email: info@flowtechfluidpower.com
To read more about the Group please visit www.flowtechfluidpower.com
Zeus Capital Limited (Nominated Adviser and Joint Broker)
Andrew Jones, Kieran Russell (corporate finance)
Dominic King, John Goold (sales & broking)
Tel: +44 (0) 20 3829 5000
finnCap Limited (Joint Broker)
Ed Frisby, Kate Bannatyne (corporate finance)
Rhys Williams, Andrew Burdis (sales & broking)
Tel: +44 (0) 20 7220 0500
TooleyStreet Communications (IR and media relations)
Fiona Tooley
Tel: +44 (0) 7785 703523
or email : fiona@tooleystreet.com
Further information relating to Paul Jonathan Gedman:
In accordance with Schedule 2(g) of the AIM Rules for Companies, Paul
Jonathan Gedman (aged 39) holds, or has held in the past five years, the
following directorships and partnerships:
Current Past five years
The Hut Management Company The Hut Group Limited
Limited
PJG Growth Limited The Hut.com Limited
Lookfantastic Group Limited
Lookfantastic Salons
Limited
Lookfantastic London
Limited
Lookfantastic.com Limited
Lookfantastic Training
Limited
Mankind Direct Limited
Mama Mio Limited
Mama Mio Distribution
Limited
EI Spa Holdings (UK)
Limited
ESPA International (UK)
Limited
Illamasqua (Holdings)
Limited
Illamasqua Limited
Primavera Aromatherapy
Limited
Paul holds no shares in the Company.
About Flowtech Fluidpower plc
Founded as Flowtech in 1983, the Flowtech Fluidpower Group is the UK's
leading specialist supplier of technical fluid power products.
The business joined AIM in 2014. Today, the Group has two distinct divisions:
Division: What we do: Locations:
----------- ---------------------------------------------- ----------------------------------
Components Supply of hydraulic and pneumatic Flowtechnology Benelux (Deventer)
consumables, predominantly through Flowtechnology China ( Guangzhou
distribution for urgent maintenance )
and repair operations across all industry Flowtechnology UK (Skelmersdale)
sectors. Additionally, support a broad Indequip (Skelmersdale)
range of OEMs supplying off-the-shelf Beaumanor (Leicester)
and tailored components and assemblies. Hydravalve (Willenhall)
Primary Fluid Power Components
(Skelmersdale)
Nelson Hydraulics (Dublin,
Lisburn, Dungannon, UK)
HTL (Ludlow)
Hi-Power Hydraulics (Cork,
Dublin, Belfast Manchester)
Hydroflex (Brussels, Rotterdam
and OudBeijerland)
Hydraulic Equipment Supermarkets
(Gloucester, Leeds)
Derek Lane & Co (Newton Abbot,
Devon)
HES Tractec (Gloucester)
----------- ---------------------------------------------- ----------------------------------
Services Bespoke design, manufacturing, commissioning, Primary Fluid Power Systems
installation and servicing of systems (Knowsley)
to manufacturers of specialised industrial Branch Hydraulic Systems
and mobile hydraulic original equipment and HES Automatec (Gloucester)
manufacturers (OEMs) and additionally HES Lubemec (Gloucester)
a wide range of industrial end users. HES Onsite (Leeds, Gloucester)
Flow Connect (Gloucester)
Orange County (Spennymoor)
----------- ---------------------------------------------- ----------------------------------
Both Group's divisions have overlapping product sets, allowing procurement
synergies to be maximised.
The above divisions are supported by a centralised back office team based
at the Skelmersdale, Lancashire, and Wilmslow, Cheshire sites in the UK
and a procurement and quality control team in Shanghai, China. In total,
the business employs over 550 people. For more information please visit,
www.flowtechfluidpower.com
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END
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