13th Feb 2020 13:58
(Alliance News) - Flowtech Fluidpower PLC said Thursday 2019 was a "disappointing year" and the company expects 2020 revenue to be down "by low single digit percentage points."
The AIM - listed specialist technical fluid power products supplier expects to report revenue of GBP112.5 million in 2019, a 1.2% increase from GBP111.1 million in 2018.
Meanwhile underlying pretax profit is expected to be GBP9 million, compared to GBP6.9 million in 2018.
"2019 was undoubtedly a disappointing year, with volumes inflated as customers built up stock ahead of a Brexit hiatus that never occurred. As the year progressed, we saw a significant slowdown in some of our key end markets, most particularly cyclical services associated to our OEM business, which culminated in the profit downgrade of 14 January 2020," the company said.
Flowtech Fluidpower said it has been taking "decisive action to reduce cost base " and has announced a "major restructuring programme", as it transitions warehousing and picking operations to materially more efficient centres.
"Overall in the UK we will be closing four warehousing facilities with the loss of 32 staff," the company said.
The company also reduced its net debt to GBP16.6 million from GBP19.9 million in 2018, and is looking to cut debt further in future years.
Flowtech Fluidpower said it will leave its dividend policy unchanged, and intends to propose a final dividend which will deliver 5% growth over the prior year. For 2018, the company declared a 6.07 pence per share dividend, up from 5.78p the year before.
Looking forward, Flowtech Fluidpower expects revenue for 2020 "to be down by low single digit percentage points, with a weak first half largely offset by a return to growth in the second, leaving underlying profit at a similar level to 2019."
However, the company expects that return to revenue growth in 2021, coupled with further planned cost savings, "should deliver significant leverage to both margins and profit".
Flowtech Fluidpower shares were trading 4.2% higher in London at 101.05p each on Thursday.
By Loreta Juodagalvyte; [email protected]
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