LONDON (Alliance News) - Fenner PLC on Wednesday said it has seen further improvements in trading in its third quarter ended July 12, despite there having been "no recovery" or further deterioration in its principal markets, and noted its full year expectations remain unchanged.
The engineer said its medical business continued to perform well and said its Secant relocation programme was now entering the testing and certification phase. Although the industrial businesses are seeing "some fragility in their wide markets", Fenner said, new product initiatives are offsetting these effects.
Fenner noted the recent small increase in the US rig count, combined with market share gains, and said this is expected to benefit its oil and gas business in the new financial year, beginning in September, given the lead times.
In the Northern Hemisphere region, Fenner said the Engineered Conveyor Solutions industrial businesses have remained stable, despite the US coal industry continuing to be challenging, and Fenner said the refocussing of its North American business remains on track.
In Australia, the operational improvements within the Engineered Conveyor Solutions business have mitigated ongoing pricing pressures from customers in the mining industry, Fenner said.
Fenner said its cash flow has remained within the range of its expectations during the three months ended July 12, but noted that its net debt at the year-end on august 31 is "likely to be above previous expectations", entirely due to currency translation, namely the weakening of the sterling following the UK's vote to leave the European Union.
This weakening of the sterling will also benefit the translation of Fenner's overseas earnings, the company said, adding, however, that the impact in the current financial year will be "marginal".
"In any event, the underlying net debt to earnings before interest, tax, depreciation and amortisation ratio, as measured by the group's lenders using constant currencies, will not be significantly impacted," Fenner said.
Fenner said it expects to achieve a full year performance in line with previous expectations, save for the small currency related increase.
Shares in Fenner were up 2.9% at 171.50 pence Wednesday morning, shortly after market open.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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