Flowtech Fluidpower PLC has released its 2023 half-year report, showing a 2.8% increase in overall group revenue despite challenging economic conditions. The solutions and services segments performed well, while the product distribution segment had a weaker performance. The company has made progress in working capital management and improving its debt position while maintaining cost controls. The CEO expects market headwinds to continue in the second half of 2023 and into 2024 but is confident in the progress being made in deploying a performance improvement plan and a refreshed strategy. The company aims to deliver mid-term scalable growth in a fragmented market.
Financial highlights for the half-year ended June 30, 2023, include a sustained gross margin of 35.5%, a decrease in underlying operating profit of £0.9m compared to the same period in 2022, and a £4.3m decrease in net debt. The company's revenue for the period was £59.1m.
The revenue performance varied across segments, with the product distribution segment experiencing a 5.6% decline in revenue, while the solutions and services segments saw growth of 11.5% and 9.8% respectively. The second quarter of the year presented more challenging trading conditions compared to the first quarter.
The gross profit margin remained strong at 35.5%, with the change primarily attributed to the sales mix in different segments. Operating costs increased by £1.0m compared to the same period in 2022, mainly due to inflation on wages and other costs, as well as investment in senior personnel.
Overall, the underlying operating profit for the period was £3.4m, a decrease of £0.9m compared to the same period in 2022. The performance of the product distribution segment was disappointing, while the solutions and services segments performed well.
The company will be providing a live presentation of its results on August 30, 2023, via the Investor Meet Company platform.