AIM listed specialist technical fluid power products supplier Flowtech Fluidpower (LON:FLO), issued the following unaudited Q3 Trading Update for the nine-month financial reporting period ended 30 September 2019:
GROUP TRADING UPDATE AND FINANCIALS
Revenue for the nine-month period ended 30 September 2019
|Total Group revenue for the period||87.3||83.7||4.3%|
Since reporting our HY1 2019 results in September the business has proved resilient in difficult market conditions; we are pleased to report organic growth for the year to date of 1.8%. Overall revenue growth in the first nine months was 4.3%, the balance coming from the full period impact of the Balu businesses which were acquired in March 2018. Gross margins and costs remain consistent with previous reports.
CASH FLOW/NET DEBT
Net debt* at 30 September 2019 was £19.1m. Net cash generated from operating activities (after accounting for tax paid) in Q3 was strong at £3.9m. After taking account of dividend payments of £2.5m, earn-out consideration regarding historic acquisition activity of £1.0m and £0.7m in respect of other investing and financing activities (including capital expenditure, lease payments and interest costs), net debt increased by £0.3m in Q3. There is no further deferred consideration to pay and Q4 is expected to be cash generative.
SUMMARY & OUTLOOK
Our short-term focus is firmly on the delivery of sustained operational improvements, procurement benefits and wider Group synergies; detailed plans to achieve these savings are currently being finalised with the main phase of implementation beginning in early 2020. We are confident that these actions, combined with our continued focus on working capital management, will deliver improved profit and cash performance. Notwithstanding the current difficult market conditions, the Board remains confident in the Group’s strategy and the outlook for future growth remains positive.
As previously announced, the half-year dividend of 2.13p per share will be paid on 29 October 2019, to those members on the register at close of business on 4 October 2019.
*Net debt excludes IFRS16 lease debt