17th Jul 2009 07:00
17 July 2009
Fenner PLC ("Fenner")
INTERIM MANAGEMENT STATEMENT
Fenner PLC today issues its interim management statement for the period 29 April 2009 to 16 July 2009.
Market Overview and Operations
Overall the Group has continued to trade satisfactorily.
Robust performances have continued in our coal related businesses, which represent the majority of the Conveyor Belting division. However, with the tightening of customers' budgets, we are experiencing a temporary slowing of order patterns following the strong demand flows in the early part of the year. Notwithstanding this, our current order books remain at a level sufficient to give reasonable forward visibility at most operating units. The new steel cord facility in Western Australia has recently been successfully commissioned, on time and to budget, and in North America our recent capital investment has begun to deliver the planned operational efficiencies.
The industrial businesses, which include most of the Advanced Engineered Products division and approximately one third of the Conveyor Belting division, whilst affected by the deterioration in global economic conditions, are showing recent signs of slow improvement with activity levels in the medical and wind power markets having held up well. Demand from original equipment manufacturers continues to be affected as destocking has been exacerbated by the reduction in underlying economic activity; however the increase in enquiry levels coupled with a levelling of the rate of order decline gives reassurance for the future. Our seals business has experienced a slowing down from the oil sector with the fall in energy prices and reduced drilling activity against a background of modest increases in demand in other sectors, reflecting initial signs of a renewal of underlying activity.
Exceptional costs amounting to approximately £5m have been incurred in the third quarter resulting from our cost reduction and reorganisation programmes. These initiatives to improve profitability are continuing into the fourth quarter and will result in further costs in the current year.
Financial Position
Underlying net borrowings are in accordance with market forecasts but on translation have benefited from the recent strengthening of sterling.
Outlook
The diversity of the Group's global markets, together with its ability to flex its activities to meet market conditions, leaves the outlook for the full year towards the lower end of market expectations. Whilst uncertainty still persists we are encouraged by signs of improvement and are well positioned, with a significantly reduced cost base, to benefit from a recovery in economic conditions.
Disclaimer
Certain statements in this report are forward-looking. These forward-looking statements reflect our current expectations concerning future events and actual results may differ materially from current expectations or historical results. Such forward looking statements are subject to risks and uncertainties, including specific economic or business conditions particularly in the US and energy markets, and significant increases or volatility in the price and availability of raw materials.
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For further information please contact:
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Fenner PLC |
01482 626501 |
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Mark Abrahams, Chief Executive |
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Richard Perry, Finance Director |
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Weber Shandwick Financial |
020 7067 0700 |
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Nick Oborne |
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