18th Sep 2018 10:42
LONDON (Alliance News) - Flowtech Fluidpower PLC lost more than quarter of its market value on Tuesday after it issued a profit warning due to delays in the Thames Tideway project and consequent liabilities.
It also said that Chief Executive Sean Fennon has decided to retire, stepping down from the board immediately but advising until the end of the year.
Shares in the maker of hydraulic, pneumatic and industrial components were down 28% at 120.85 pence each in morning trade, the worst performer in the AIM Index.
Flowtech expects underlying operating profit for 2018 to be marginally below market expectations due to its inability to replace delayed income from the Thames Tideway project. Flowtech is supplying hydraulic cylinders and power units to a sub-contractor on the project, aimed at improving London's sewer system. Flowtech's contract is worth GBP1.5 million and the completion date has been pushed back to early 2019.
It also said that it has seen some softening in markets and remains cautious until there is clarity on economy after Brexit.
Flowtech, however, posted 65% jump in first half revenue due to contributions from acquisitions, increased margins and strong trading markets.
For the six months to June end, Flowtech recorded a 65% jump in revenue to GBP56.4 million from GBP34.2 million, resulting in a pretax profit of GBP4.2 million, versus GBP3.1 million a year ago.
Adjusted operating profit grew 27% to GBP5.7 million from GBP4.5 million. Margins increased to 36.1% from 34.1%.
The company has lifted its dividend payment by 5.2% to 2.03p per share from 1.93p.
CEO Fennon will retire as part of Flowtech's transformation plans to expand its UK and international footprint. He will remain with the company in an advisory capacity until end of the current year.
Flowtech has appointed Chief Financial Officer Bryce Brooks as new CEO. Russell Cash, a partner at FRP Advisory LLP, has been named as replacement CFO.
The company also said that former chairman Bill Wilson will rejoin the company as non-executive director. Wilson previously was non-executive chairman at Fluidpower Holdings Ltd for 18 months prior to the IPO listing and the exit of Gresham Private Equity in May 2014.
The board and management changes are with immediate effect.
Related Shares:
Flowtech Fluid.