Business
Trading Update - for the year to 31 December 2019
Trading Update - for the year to 31 December 2019.
About this update from Flowtech Fluidpower Plc
[{"type":"text","content":"\n \nRNS Number : 6687Z Flowtech Fluidpower PLC 14 January 2020 \n\nThe 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.\n \n \nTuesday, 14 January 2020\n \n \n\n\n\nFLOWTECH FLUIDPOWER PLC\n(\"Flowtech\" or the \"Company\")\n \nTrading Update\n \n\n\n\n \n \nFlowtech Fluidpower plc, the UK's leading specialist supplier of technical fluid power products, provides an update on trading for the financial year to 31 December 2019.\n \nMarket conditions in the second half of 2019, in particular the final quarter, have been challenging; data from the British Fluid Power Association shows a decline in distribution channel revenues of 7% and 13% for October and November respectively, and a decline in revenue of in excess of 10% in October for the manufacturers within the sector. \n \nAgainst this backdrop, the Group experienced organic revenue decline of c.10% in Q4; as a result Group revenue is expected to be c.£112.4m which represents overall organic revenue reduction of c.1.5% (H1 growth of c.3% and H2 decline of c.6%) for FY19. The Board now expects to report underlying profit before tax* of not less than £9.0 million. \n \nExpectations for FY20 have been reviewed by the Board and whilst it is confident that investments made in 2019 will lead to market outperformance, current conditions are such that achieving organic growth may prove difficult, in particular in the first half of FY20. It is therefore possible that the positive impact of the cost saving initiatives which have now been formulated, and which will shortly be implemented, will be offset, at least in part, by market conditions remaining challenging. \n \nDespite current trading, the Board is encouraged to report that significant and sustainable reductions in working capital throughout 2019 of c.£5m have been achieved. Net debt** of £16.6m as at 31 December 2019 is in line with market expectations. Q4 has seen debt reduction of £2.5m in a period which paid out a £1.3m interim dividend. A combination of strong o...