RNS Item

Flowtech Fluidpower plc

("Flowtech", "Company" or "Group")

Trading Update

Flowtech Fluidpower plc (AIM: FLO), issues the following unaudited Trading update ahead of the Group's annual financial results for the year ended 31 December 2015, which will be announced on 12 April 2016.

2015 HIGHLIGHTS

·      Group revenue is expected to be 18% up on 2014 at approximately £44.7 million

·      Gross margins remain robust and in line with management expectations

·      The Balance Sheet at 31 December 2015 remained lowly geared with net debt expected to be c.£8.9 million

·      Overall, solid performance which is anticipated to result in earnings and profitability being within market estimates

DIVIDEND

Our aim is to continue on capital growth through investment in the business and increasing ROCE.  As a Board, we remain committed to a progressive dividend policy. Based on the year's performance and our confidence as a whole, the Board will, barring any unforeseen situation, be intending to propose to shareholders a final dividend for the year ended 31 December 2015 in line with current market expectations, which will deliver a 5% increase over 2014.

LOOKING AHEAD

Whilst industrial markets are currently presenting some challenges, the Directors view the future with confidence and are optimistic that the Company can continue to grow both organically and by acquisition, with a number of acquisition opportunities being actively pursued.

The Flowtech Group now operates in two divisions: specialist Power Motion Control and Distribution; this allows us to showcase our significant technical expertise & high service levels to our customers across the business.  This approach gives us a solid platform for growth as well as creating new opportunities particularly for the Group's growing interest in the hydraulic equipment and components sector. 

PEOPLE

As part of this focused drive we are pleased to announce senior appointments within the business.

·      On I March 2016 Nick Fossey will take up a new role as Managing Director of the Power Motion Control Division and will be appointed to the Group Operating Board.  He joins us from Eaton Corporation where he spent almost 13 years, including as a Director of Sales and Marketing EMEA for nearly ten years.  Prior to this he was Managing Director at Rockwell Automation.  Through his senior leadership roles, he has gained an extensive knowledge of the hydraulics distribution sector internationally, particularly within Europe, which will be invaluable to the future development of our business model.

·      Paul McGrady was promoted from Sales Director to Managing Director of Primary Fluid Power on 1 January 2016 and also joined the Operating Board.  Paul has a strong understanding of the PMC market having been closely involved with Stephen Merrie in its evolution since 1999.   

·      Stephen Merrie retired from Primary on 31 December 2015.  On behalf of all stakeholders, the Board would like to thank him for his significant contribution during his time as part of the Group and wish him well in his retirement.

SUMMARY

Management continue to remain optimistic about both the commercial opportunities and the prospects of the Group as a whole.  The Board has a clear strategy to develop the opportunities that will deliver future growth and, despite some headwinds Flowtech is expected to deliver another year of solid progress.

The Directors look forward to updating shareholders further on the Group's overall performance at the time of the preliminary results in April.