TIDMFLO
RNS Number : 2663K
Flowtech Fluidpower PLC
21 April 2020
NEWS RELEASE
Issued on behalf of Flowtech Fluidpower
plc
Immediate Release
Tuesday, 21 April 2020
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")
Trading Update
for the three-months ended 31 March (the "Period")
Period Period Change
2020 2019
Unaudited Unaudited
GBPm GBPm
----------- -----------
Revenue by division:
Components 22.9 26.0 (11.9%)
Services 4.0 4.0 0.0%
----------------------------- ----------- ----------- --------
Total Group revenue for the
period 26.9 30.0 (10.3%)
----------------------------- ----------- ----------- --------
Net debt* 15.6 20.5
----------------------------- ----------- ----------- --------
*Net debt excludes IFRS16 lease debt
trading
Prior to the COVID-19 the lockdown Q1 performance was in line
with our expectations: down on the buoyant conditions seen in early
2019, but with a return to growth in customer order patterns and
outlook. However, the final few weeks of the Period created an
altogether different position going into Q2. Many of our suppliers
and customers suspended operations, although recent indications
suggest that some have either already reopened or are planning to
reopen in May, albeit with reduced capacity.
The most marked effect of the current situation has been in our
Components segment, which are those profit centres where most sales
are directly into OEMs. The Services segment had a good order book
coming into the year, and whilst it was also affected by the
downturn in late March, revenue for the quarter remained flat year
on year.
While there are no first quarter industry statistics currently
available from the BFPDA ** or BFPA***, the Board believes that the
Group has generally traded in line with the sector during the
period.
net debt/cashflow
Net debt at 31 March 2020 was GBP15.6m, a GBP1m reduction from
the position at 31 December 2019 and well within our aggregate
banking facilities of GBP25m. Net cash flow in April has been as
expected, and whilst we have not entered the end of month
collection period, we expect receipts to be received in full albeit
with some slight delays in timing. We believe this should not
create any significant disruption to the overall cash flow
cycle.
Restructuring activities
In February 2020 we announced a major restructuring programme to
transition warehousing and picking operations to more efficient
centres. In the UK we are currently closing four warehousing
facilities, the annualised savings from which are estimated to be
GBP1.6m, with a GBP0.8m impact/benefit in 2020. The cash cost of
this restructuring is estimated at GBP1.8m, of which GBP0.5m was
incurred in 2019. We are pleased to confirm that this complex and
tightly managed project is on time and within budget.
Since safe working guidance was introduced last month, costs
have been reduced by a combination of internal actions and the
utilisation of "furlough" or equivalent schemes introduced in the
UK, Republic of Ireland, and the Netherlands. We estimate that our
cost base has fallen by around 25%, with further savings still to
come from our restructuring activities. We will continue to pursue
our rationalisation and cost reduction programmes, creating
operational efficiencies in our procurement, logistics, sales, and
back office activities.
OUTLOOK
Whilst the full impact of the COVID-19 lockdown remains unclear
it is not possible to make any accurate predictions for the
remainder of the year. A significant part of our sales depends on
the manufacturing and construction sectors, both of which have seen
large scale shutdowns. It is possible that these sectors will begin
to reopen during early May, and our current plan is to ensure that
we continue to support/service our customers and react as quickly
and effectively as possible if this were to happen. However, if
there is a need to undertake further cost reductions should the
lockdown extend further into the year, we must ensure that we are
in a position to initiate change without detriment to our future
business and our customers. This being said, the work undertaken as
part of our restructuring activities over the past twelve months is
helping our planning enormously in this regard.
We also thank all our people for the commitment to the business
and the support of colleagues in these times. Overall we remain
confident that despite the disruption, our business should generate
positive cashflow through 2020 and 2021, helping to further reduce
net debt and create a solid platform for growth when things return
to a more normal situation.
** British Fluid Power Distributors Association
*** British Fluid Power Association
ENQUIRIES:
----------------------------------------------------------------
FLOWTECH FLUIDPOWER PLC
Malcolm Diamond MBE, Non-Executive Chairman
Bryce Brooks, Chief Executive Officer
Russell Cash, Chief Financial Officer
Tel: +44 (0) 1695 52796
Email: info@flowtechfluidpower.com
Corporate Marketing Manager: Eve Rigby Tel: +44 (0) 7384 254161
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
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 Flowtechnology UK (Skelmersdale)
and repair operations across Indequip (Skelmersdale)
all industry sectors. Additionally, Beaumanor (Leicester)
support a broad range of original Hydravalve (Willenhall)
equipment manufacturers (OEMs) Primary Fluid Power Components
supplying off-the-shelf and (Knowsley)
tailored Albroco (Knowsley)
components and assemblies. Nelson Hydraulics (Dublin, Lisburn,
Dungannon, UK)
HTL (Ludlow)
Hi-Power Hydraulics (Cork, Dublin,
Belfast, Knowsley)
Hydroflex (Brussels, Rotterdam
and OudBeijerland)
Hydraulic Equipment Supermarkets
(Gloucester)
Derek Lane & Co (Newton Abbot,
Devon)
Tractec (Gloucester)
----------- ------------------------------------ -------------------------------------
Services Bespoke design, manufacturing, Primary Fluid Power Systems
commissioning, installation and (Knowsley)
servicing of systems to TSL (Knowsley)
manufacturers Branch Hydraulic Systems
of specialised industrial and (Gloucester)
mobile hydraulic original equipment Automatec (Gloucester)
manufacturers (OEMs) and Lubemec (Gloucester)
additionally Onsite (Leeds, Gloucester)
a wide range of industrial end Flow Connect (Gloucester)
users. Orange County (Spennymoor)
----------- ------------------------------------ -------------------------------------
Both Group 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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April 21, 2020 02:00 ET (06:00 GMT)
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