Flowtech Fluidpower PLC Acquisition, Trading Update & Notice of HY Results (9091F)
August 02 2016 - 2:00AM
UK Regulatory
TIDMFLO
RNS Number : 9091F
Flowtech Fluidpower PLC
02 August 2016
FLOWTECH FLUIDPOWER PLC
("Flowtech" or "Group" or "Company")
Acquisition of Triple Six Limited
&
Trading Update and Notice of Half-Year Results
LONDON: TUESDAY 2 AUGUST 2016: Specialist technical
fluid power products supplier Flowtech Fluidpower
plc (AIM: FLO), is pleased to announce the further
strengthening of its product offering in the hydraulics
sector through the acquisition of Triple Six Limited,
and provide an update ahead of the release of the
Company's Half-Year Results (for the period ended
30 June) which will be announced on Tuesday, 13
September 2016.
ACQUISITION OF TRIPLE SIX LIMITED ("TSL")
Based in Yorkshire, TSL is a specialist designer
and distributor of several ranges of hydraulic cylinders
and semi rotary actuators to a wide variety of industries
including civil engineering, railways, nuclear and
marine. TSL will trade as part of the Power Motion
Control division (PMC) under the leadership of its
MD Steve Rushworth. Steve established TSL in 2008,
and has over forty years' knowledge of the hydraulics
sector in the UK and Europe. The acquisition was
completed on 29 July 2016.
For the year ended 31 December 2015, turnover was
GBP1.2 million producing a profit before tax of
GBP0.15 million. Net assets at the same date were
GBP0.5 million.
Total consideration comprised GBP0.75m for the trading
operation and a further GBP0.35 million for the
net cash position held at completion, a total of
GBP1.1 million. The consideration relating to the
trading operation is to be satisfied as to GBP0.45
million in cash on completion with the balance being
contingent on the operating profit performance of
the business over the next two years.
Commenting, Sean Fennon, Chief Executive Officer,
said:
"The acquisition of TSL continues the development
of our PMC division and further enhances our offer
to the power and motion control market. The acquisition
again widens the customer sectors we serve. This
is our third acquisition of 2016 and sixth overall
since we came to market, and we are confident of
further progress with our acquisition strategy before
the end of the year."
TRADING UPDATE
Sales analysis: Group revenue by division is expected
to be as follows:
Division 2016 2015 H1 Growth
H1
---------------- ------- -------- -------
GBP000 GBP000
Flowtechnology 18,093 17,488 2.0%*
PMC 8,268 3,935 110.1%
Process 1,027 --
---------------- ------- --------
Group total 27,388 21,423 27.8%
---------------- ------- -------- -------
* After adjusting for like for like currency rates
growth is 1.4%.
Highlights
* Revenue in the HY1 was solid at c.GBP27.4m reflecting
growth across the Group (HY2015: GBP21.4m).
* Strong momentum within PMC and Process divisions.
* Integration of acquisitions in line with expectations
underpinning our platform for future growth.
* Margins remain resilient across all divisions.
* Net debt c.GBP14.1m at 30 June 2016 - in line with
expectations.
* Expanded customer profile into new end-user
industries particularly in the MRO market.
* Investing for the future - additional cross
divisional sales resource employed to focus & support
the growing servicing of larger national customers.
Outlook
Flowtech remains confident in its ability to execute
its proven strategy to develop in its technically
specialised sectors in the UK and international
markets. The Company is recognised as a highly technically
skilled and resilient business operating in a fragmented
fluid power distribution market. The Group operates
in a "live" pricing environment and while input
prices are expected to increase in H2 on the back
of the sterling downgrade, the Board is confident
that in a manner similar to other recent periods
of negative sterling influence the Group will be
able to maintain overall margins and cash generation.
In addition to organic sales growth there remains
a number of opportunities to further enhance Flowtech's
multi-channel approach through; its investment in
people and increased sales resource, the ongoing
development of own-brand and OEM product offering,
as well as through add-on earnings enhancing acquisitions.
The outcome of the EU referendum has caused concern
across various markets with additional currency
weakening of sterling against dollar and euro. Mid-year
trading in distribution markets which the Flowtechnology
division supplies has been more challenging and
as a result the Board believes that the full year
results will be marginally below market expectations.
The Board continue to view the future with a high
degree of optimism that it can continue to deliver
profitable growth while maintaining consistent high
levels of service to our diverse customer base.
We remain committed to a progressive dividend policy
and we expect to declare an increase in the dividend
payable for 2016 in line with our previously stated
intentions.
Enquiries:
Flowtech Fluidpower plc
Sean Fennon, Chief Executive Officer
Bryce Brooks, Chief Financial Officer
Tel: +44 (0) 1695 52796
AiM: symbol: FLO
email: info@flowtechfluidpower.com
website: www.flowtechfluidpower.com
Zeus Capital Limited (Nominated Adviser
and Broker)
Dominic King or Andrew Jones
Tel: +44 (0) 203 829 5000
TooleyStreet Communications (IR and media
relations)
Fiona Tooley
Tel: +44 (0) 7785 703523
email: fiona@tooleystreet.com
Editors' note:
Flowtech Fluidpower plc, founded as Flowtech in 1983,
is the UK's leading specialist supplier of technical
fluid power products with modern distribution facilities
in the UK and Benelux. It offers an unrivalled range
of Original Equipment Manufacturer (OEM) and Exclusive
Brand products to over 3,600 distributors and resellers.
Its catalogue is recognised as the definitive source
for fluid power products, containing approximately
52,000 individual product line and is distributed
to more than 85,000 industrial Maintenance, Repair
and Overhaul end users (MRO). Over 80% of product
is stocked and if ordered by 10pm, can be delivered
next day in the UK, providing 'best in industry'
service offering. The Group's headquarters and main
distribution centre is in Skelmersdale, Lancashire
with further distribution centres in the Netherlands
and China. The Power Motion Control Division (PMC)
has operations in Merseyside, Northern Ireland and
the Republic of Ireland.
The Group has a clear view of its growth objectives
- to create a specialist fluid power organisation
that remains focused on its core competencies whilst
servicing the varied industrial and manufacturing
sectors through its delivery of 'class-leading' service
and support. Our long term growth model is based
on both organic growth coupled with complementary
acquisitions in a very fragmented marketplace.
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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