is a world leader in reinforced polymer technology. Our strategy is to
increase market share and target new high margin product areas. We will
concentrate on growing those businesses where we already demonstrate
through our skills in applications, design, materials technology and
to customer service as well as by carefully planned acquisitions
Fenner PLC 2017 Half Year Results
PLC, a world leader in reinforced polymer technology, today announces
its results for the half year ended 28 February 2017.
Half year 2017 2016
Revenue £307.4m £276.8m
Underlying operating profit 1, 4 £24.0m £15.0m
Underlying profit before taxation 2, 4 £16.5m £8.1m
Profit/(loss) before taxation £13.8m £(23.1)m
Operating cash flow 4 £34.0m £19.1m
Underlying earnings per share 2, 3, 4 6.3p 2.9p
Dividend per share 1.4p 1.0p
· Revenue up 11% to £307.4m, assisted by market share gains and exchange rates
· Underlying operating profit up 60% (27% at constant currencies)
· Underlying operating margin strongly ahead in both divisions
· Underlying earnings per share up 117% to 6.3p
· Dividend per share up 40% to 1.4p
· Strong cash flow resulted in net debt reducing to
£144.7m (£28.7m lower than February 2016 at constant currencies) and
net debt/EBITDA of 1.9 times (at constant currencies)
· Expected outcome for the year above previous
expectations at the operating profit level with a further benefit to
earnings from a lower tax rate in the current financial year
Mark Abrahams, Chief Executive Officer, commented:
"It is pleasing that the restructuring of the Group has created a
platform from which we are now growing and making steady market share
gains. We look forward to maintaining this momentum."
1 Underlying operating profit is before amortisation of intangible assets acquired and exceptional items
2 Underlying profit before taxation and
underlying earnings per share are before amortisation of intangible
assets acquired, exceptional items and notional interest
3 Underlying earnings per share is based on the basic weighted average number of shares in issue
4 Underlying and non-GAAP measures
have been presented to provide a more meaningful measure of the
underlying performance of the business. Reconciliations of these
amounts from the most directly comparable measures recognised under
International Financial Reporting Standards ("IFRS") are set out in
A live audio webcast of the analyst presentation, hosted by Mark
Abrahams, Chief Executive Officer, and John Pratt, Group Finance
Director, can be accessed at 9.30 am today on the Group's website
For further information please contact:
Mark Abrahams, Chief Executive Officer
John Pratt, Group Finance
Weber Shandwick Financial
) today: 020 7067 0700
) thereafter: 01482 626501
020 7067 0700
Notes to editors:
Fenner PLC is a world leader in reinforced polymer technology,
providing local engineered solutions for performance-critical
applications. The Group operates through two divisions:
Advanced Engineered Products. The AEP division is a group of nine
businesses that use advanced polymeric materials and technical
expertise to provide high value-added solutions to customers' most
challenging engineering problems across a variety of markets, generally
classified as specialist industrial, medical and oil & gas. AEP's
trading names include Hallite, Fenner Precision, Fenner Drives, Secant
Group, Charter Medical, CDI Energy Products and EGC Critical Components.
Engineered Conveyor Solutions. The ECS division, trading under the
Fenner Dunlop, Fenner and Dunlop brand names, is an established global
leader in the supply of heavyweight conveyor belting and related
services to the mining, industrial and bulk materials markets. ECS has
leading presences in the Northern Hemisphere (principally North America
and Europe) and the Southern Hemisphere (principally Australia).
Interim management report
In January, we reported that the Group was performing well, benefiting
from both the refocusing of our businesses and from market share gains.
The Group's results for the first half of the financial year reflect
the improvements indicated at that time. Momentum is being maintained
in the second half of the financial year as the Group continues to
deliver its strategy.
Revenue for the period was £307.4m (2016: £276.8m), an increase of 11%.
Underlying operating profit was
(2016: £15.0m), an increase of 60%. Underlying profit before taxation
was £16.5m (2016: £8.1m), an increase of 104%. Underlying earnings per
share was 6.3p (2016: 2.9p), an increase of 117%.
A particular feature of the results was the increase in underlying
operating margin which increased to 7.8% (2016: 5.4%) reflecting
operational improvements and efficiencies across many of the Group's
operations. In addition, as the period progressed, there were
increasing benefits from operational gearing as certain businesses
generated revenue growth.
The Group's cash flow was again strong with higher profits and lower
capital expenditure. Net borrowings ended the period at £144.7m (31
August 2016: £150.0m) despite currency movements of £5.4m. Measured at
constant exchange rates, net debt at 28 February 2017 was £28.7m lower
than at 29 February 2016.
During the period, the Group acquired the non-controlling interests in
BBCS and LECS, each of which are conveyor service businesses located in
Australia. The Group has no further deferred consideration payments
outstanding. Also during the period, the Group disposed of Xeridiem
Medical Devices and CDI Norway.
Advanced Engineered Products
AEP's revenue was £136.9m (2016: £139.8m at constant currencies). After
adjusting for business disposals and closures, like-for-like revenue
grew by 4%. Underlying operating profit was £17.9m (2016: £15.5m at
constant currencies) and underlying operating margin increased to 13.1%
The division's results reflect improved operational performances across
its businesses, driven by market share gains, new product introductions
and prudent cost control. Whilst market indicators showed some softness
at the start of the financial year, they gradually strengthened as the
Advanced Sealing Technologies
Advanced Sealing Technologies generated a higher operating profit and
operating margin on slightly increased revenue of £60.1m (2016: £59.9m
at constant currencies). Excluding businesses which have been closed or
sold (the former CDI operations in the UK and Norway), revenue
increased by 7%.
During the period, there were progressive improvements in oil & gas
industry lead indicators such as rig count, albeit from very low
levels. Notwithstanding this, the average rig count in the period was
below the average for the same period last year.
Both CDI and EGC have continued to make market share gains in their
respective segments of the oil & gas industry, partly as a result
of having introduced new products that reflect customer demand for
higher technical specifications. As a result of both the improving
market and the market share gains, order flow increased steadily
throughout the period.
Hallite performed strongly, delivering revenue growth well ahead of
industry indicators and even greater increases in terms of operating
profit and margins. The strong performance reflects new product
introductions as well as some re-stocking in the supply chain.
Precision Polymers' revenue increased to £52.2m (2016: £50.8m at
constant currencies) and operating profit and margin were both well
ahead of the previous period.
Precision US finished the period strongly after some softness in
customer ordering in the autumn reflecting uncertainty around the
outcome of the US election as well as normal seasonality patterns.
Precision UK continues to make good progress as it expands both its range of elastomeric products and its customer base.
Mandals achieved a modest improvement in revenue for the period; its
order book has improved following management changes and new product
Solesis Medical Technologies
Revenue for the period was £24.7m (2016: £29.3m at constant currencies
and including a contribution from Xeridiem Medical Devices sold in
September 2016). Operating profit and operating margin were both well
ahead of the prior period.
Secant Group is in the final validation phase of its relocation
process. It achieved a strong operating result for the period, with
some third party project delays offset by new developments and other
efficiencies. The business' new product pipeline has been further
Charter Medical continues to trade well following the managerial and
operational changes made last year. Demand for cell therapy products
has been strong.
Engineered Conveyor Solutions
ECS's revenue was £170.5m (2016: £188.6m at constant currencies).
Underlying operating profit was higher at
£10.4m (2016: £7.0m at constant
currencies) and underlying operating margin recovered to 6.1% (2016:
In the mining industry, whilst there was a general improvement in
sentiment due to higher commodity prices and mineral extraction rates,
this was not generally reflected in higher orders for replacement belt;
the increased operating profit and margin were generated by the
substantial operating improvements implemented across the business.
Revenue for the period was £89.8m (2016: £103.6m at constant currencies).
In ECS North America, industrial volumes continued to grow as a result
of the refocusing commenced last year. In mining, whilst below
the corresponding period last year, volumes improved from recent lows
which, when combined with significantly improved operating
efficiencies, increased overall profitability.
In Europe, financial performance was constrained by the ongoing shortage of major project work.
Revenue for the period was £81.3m (2016: £86.7m at constant currencies).
In Australia, on flat volumes, ECS achieved a higher profit than in the
corresponding period last year reflecting its strengthened market
position and the operational improvements made across the business.
Despite an improved sentiment within the mining industry, the business
has not yet seen a general increase in order intake although there are
now some indications that belt de-stocking is coming to an
end and that project work may resume next year.
ECS China continues to face significant pressures from the on-going re-organisation of the domestic coal industry.