Trading update
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"In 2023, we welcomed Mike England as our new CEO. With some significant team changes, he has focussed on implementing the near term performance improvement plan and the refreshed strategy to enable the firm platform from which the business can grow over the medium term. Whilst 2023 has been a more difficult year, I am confident that the actions Mike and his team are taking will drive strong returns in shareholder value."
Roger McDowell, Non-Executive Chair
The Board of Flowtech issues the following unaudited Trading Update ahead of the Group's 2023 annual results.
2023 Trading update
The Board is pleased to report that the underlying profit* for the year ended 31 December 2023 is expected to be in line with market expectations.^
| Segment revenue: | FY 2023 Unaudited £m | FY 2022 Audited** £m | Change 2023 v 2022 |
|---|---|---|---|
| Great Britain ("GB") | 79.3 | 84.5 | -6.2% |
| Island of Ireland ("Ireland") | 22.0 | 19.5 | 13.1% |
| The Benelux | 10.8 | 10.8 | 0.5% |
| Total Group revenue for the period | 112.1 | 114.8 | -2.2% |
| Net debt** | 14.7 | 16.0 | 1.3 |
Notes
* Underlying profit (EBIT) is profit before finance costs, tax and separately disclosed items which comprise costs relating to amortisation, impairment of intangibles, restructuring, acquisition and share based payments.
** Excludes IFRS16 related debt.
In a subdued market, the Group experienced a modest decline in revenue of 2.2% with weaker performance in GB specifically in product distribution and in Engineering Services where a small number of larger original equipment manufacturer customers (OEMs) experienced market headwinds and resulting volume reduction. Despite this, the Board is pleased with the advancements made against the performance improvement plan and refreshed strategy introduced by our new CEO, Mike England, and his strengthened leadership team. Our business in Ireland showed particularly strong growth and our intention to build on this success aiming for similar growth in other regions is a key priority in 2024.
The industry market forecasts remain subdued. We have continued to invest in the performance improvement plan and, whilst we see much self-help which will start to drive benefits in 2024 and beyond, we are more cautious about current year growth.
Net debt
Net debt** reduced to £14.7m by year-end (2022: £16.0m). This is in excess of market expectations and largely results from an investment in fast moving inventory towards the year-end; notwithstanding this, we continue to focus on inventory reduction and improving inventory turnover.
Including IFRS16, year-end net debt was £20.3m, representing a £2.4m reduction over FY23.
^Market forecasts for FY23 prior to the release of this announcement were:
revenue of £115m, underlying EBIT £6.0m, and underlying PBT £4.6m
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