The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

FLOWTECH FLUIDPOWER PLC

("Flowtech", the "Group" or "the Company")

Specialist full-service supplier of technical fluid power products and services

TRADING UPDATE AND NOTICE OF RESULTS

The Board of Flowtech issues the following unaudited Trading Update ahead of the Group's preliminary results for the year ended 31 December 2021.

2021 TRADING UPDATE

We expect to report Group revenue of c£109.0m, a 14.6% increase against the COVID-19 impacted 2020 comparative. We have included 2019 revenue in the table below to provide more meaningful comparisons. In summary our revenues are much improved in 2021 but have not yet reached pre pandemic levels. 

**Excludes IFRS16 related debt; FY2020 figure includes c.£0.9m of deferred VAT linked to Government COVID-19 related support schemes.

Overall, we expect our FY2021 underlying profit *** to be in line with the Board's expectations.

NET DEBT

Net debt** at 31 December 2021 was £15.4m, representing a £3.8m increase compared with £11.6m at 31 December 2020. The increase reflects the necessary investment we have made in our inventory position, designed to provide some protection against the significantly increased lead times that are now prevalent, as well as the recovery of our revenue streams and the associated increase in our trade receivables.

DEVELOPMENTS IN GROUP STRATEGY

In April 2021 we detailed the key elements of our growth strategy, and we have continued to make progress in key areas:

OUTLOOK & DIVIDEND

Whilst demand throughout the fluid power market has continued to recover, it is clear that it will be well into 2022, if not longer, before global supply chains for fluid power product return to pre pandemic levels of both consistency and breadth of supply. Good progress against our strategic objectives continues to enhance the Group's medium term prospects. However, until supply is fully recovered, the Board is more cautious in the short term outlook.

Overall, the Board is satisfied with the trading performance in the year, is encouraged by the start to 2022, and pleased with the progress made against our key strategic objectives.

The Board expects to reintroduce a final dividend payment for the financial year 2021. Thereafter our dividend policy will recognise both the growth requirements of the business and the interests of our shareholders.

NOTICE OF RESULTS

The Company will update shareholders further at the time of the 2021 preliminary results announcement, scheduled to be released by the end of March 2022.

Roger McDowell, Non-Executive Chair commented:

"Whilst prioritising the wellbeing of our people the business has made solid progress against both our strategic goals and trading, notwithstanding supply chain challenges. Whilst there are still headwinds, we expect this momentum to continue in 2022 and remain confident for the future."

Notes

*  Prior to 2021 Flowtech and Fluidpower Group Solutions figures were reported under one accounting segment, Components. The aggregate revenue shown in the table in this RNS equates to that reported under the heading of Components in the 20199 and 2002 annual report and accounts.

** Our reported Net debt figure does not take account of IFRS16 related debt which has reduced by c£0.25m in the year.  

*** Underlying profit is profit before tax, asset impairment and separately disclosed items which comprise costs relating to amortisation, restructuring, acquisition and share based payments.