Engineer Fenner (FENR) looks set to return to profit and revenue growth this year after a period of dire trading prompted by a sell-off in its key raw materials markets.
A bullish trading update published today is prompting N+1 Singer analyst Jon Lienard to raise earnings forecasts for the year to 31 August 2017 by around 10%.
Prior to the trading update, Lienard forecast Fenner's sales at £606.9m, up 6% on a year earlier, and earnings per share of 10.8p, up almost 30%.
'Another positive trading update from Fenner which confirms that the tide is moving in their favour,' writes Lienard in a commentary published today.
ADVANCED ENGINEERING
Performance in the year to 31 August 2017 is 'comfortably ahead of expectations' driven by big improvements in Fenner's Advanced Engineering Products (AEP) unit, particularly in Hallite, a division which provides fluid seals for hydraulic equipment like tractors and diggers.
Fenner also has a medical products business in AEP which is performing well.
Engineered Conveyor Solutions (ECS), Fenner's market-leading provider of Dunlop conveyor belts mainly to the coal industry, saw stabilisation in North America and Australia but weaker results in China.
'While market conditions remain similar to those reflected in our November trading statement, we are performing well and gaining traction from market share gains and from our refocusing of the businesses,' says chief executive Mark Abrahams.
'As a consequence the board envisages that the group's results for the current financial year will be comfortably above previous expectations.'
Shares in Fenner trade 14% higher at 270p.
Energy sector peer Rotork is also gaining, up 4% at 260p
