24th Sep 2019 09:43
(Alliance News) - Shares in engineering firm Flowtech Fluidpower PLC sank Tuesday as it warned of slowing revenue growth amid subdued markets, despite a robust performance in the first half of 2019.
Shares in Flowtech were 10% lower at 111.98 pence in London on Tuesday.
For the six months ended June 30, pretax profit fell 9.5% to GBP3.8 million from GBP4.2 million the year prior. This was despite revenue rising 5.7% to GBP59.6 million from GBP56.4 million the year before.
Profit performance was hurt by a 16% rise in administrative costs to GBP14.8 million from GBP12.8 million the year prior. This was primarily due to acquisition and restructuring costs.
Underlying pretax profit - excluding one-off items - increased 3.7% to GBP5.6 million from GBP5.4 million the year prior.
"We are pleased with the progress being made across our strategic initiatives and we remain confident in the long-term outlook for the group," Flowtech Chair Malcolm Diamond said.
Flowtech cautioned, however, it had experienced "reduced" sales activity during the summer months with "little or no" sales growth now expected for the remainder of 2019. This follows a prolonged period of organic sales growth at the firm.
Consequently, Flowtech anticipates underlying pretax profit for 2019 to between GBP10.8 million and GBP11.2 million. In 2018, underlying pretax profit stood at GBP10.7 million.
"In the short term we expect more subdued trading conditions and it is important we remain focused on controlling what we can control, in particular our cost improvement and working capital initiatives", Diamond added.
Flowtech proposed a 2.13 pence per share interim dividend, up 4.9% from 2.03p the year prior.
By Ahren Lester; [email protected]
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