Flowtech’s sales rebound, but product mix squeezes gross margin

Flowtech Fluidpower ($FLO-LSE) reported first-half revenue of £70.4 million, up 23.8%, with like-for-like growth of 13.3% after removing acquisition contributions. Underlying EBITDA increased to £4.5 million from £3.5 million, while underlying operating profit rose to £2.3 million from £1.6 million. The sales order book was more than 20% higher than at the start of the year.

The improvement was partly offset by a 2.2-percentage-point fall in gross margin to 37%. Management cited the mix of acquired businesses, initiatives to increase sales volumes, price pressure and inflation. Statutory operating profit was £1.6 million, below the adjusted measure but higher than the prior year’s £0.8 million. The results show stronger demand and acquisition benefits, alongside continued pressure on how much profit each sale generates.

Sources:

• Flowtech Fluidpower — half-year report, RNS