Fenner PLC Regulatory News (FENR)

12 March 2015

Fenner PLC

("Fenner" or "the Group")

Pre-Close Trading Statement

Trading in the period

The Group's trading in the first half of its financial year ended 28 February 2015 continued to be characterised by a good performance by the AEP Division and challenging market conditions for the ECS Division. As a consequence, AEP is now contributing more than one-half of the Group's operating profit1.

Considerable emphasis is being placed across the Group on cost reduction. There are ongoing programmes in both ECS and AEP to manage variable costs. In addition, the Group can confirm that it has now completed the necessary actions to deliver the annualised reduction in cash overhead expenditure of £9 million announced in the AGM Trading Statement. As previously advised, there will be an exceptional charge in the first half of the year to reflect the expenses incurred in achieving these cost reductions.

Trading in the AEP Division has continued to be in line with expectations and the Division finished the first half of the year well. The Group's medical activities were expanded by the acquisition of Charter Medical, which augments the technology platform of Solesis and continues the strategy of developing our medical business both organically and by acquisition.

In ECS, the results of our Americas and EMEA businesses in the period remained in line with expectations. Whilst our market position in Australia remains strong, results were below expectations as continuing price pressure was exacerbated by lower activity levels.

Balance sheet

The Group's balance sheet remains strong. Borrowings at 28 February 2015 were in line with expectations and, as a result of our focus on cash management, reflected better than usual seasonal movements in working capital, offset by exchange rate variations and the acquisition of Charter Medical for £19 million.

Outlook

The non-oil specialty polymer businesses in AEP, which represent approximately two-thirds of divisional turnover, are expected to continue to perform well. The acquisition of Charter Medical is expected to provide a small positive impact on the Group's earnings for the year as a whole.

As previously anticipated, in response to the continuing lower oil price, order intake in AEP's businesses which serve the oil & gas industry has recently fallen quite sharply. We continue to implement further cost reductions whilst preserving the businesses' strategic strengths and their flexibility to respond to any recovery in their markets.

In ECS, we expect a continuation of the difficult trading conditions seen in the first half, although the results will benefit from the reduced cost base. The Division is well invested and requires only limited capital expenditure in the near future. Consequently, the business is being managed so as to generate good cash flow whilst ensuring a cost base appropriate to the demand level.

As a consequence of the above, the Group anticipates achieving underlying earnings per share for the year moderately below expectations.

Reporting timetable

The Group expects to release its Half-yearly Report on 22 April 2015.

1 Before amortisation of intangible assets acquired and exceptional items

-Ends-

Analyst and Investor conference call

A conference call for analysts and investors will be held at 8:30 a.m. (UK time) today to discuss this statement. Participants can join the call on + 44 (0)20 3059 8125. A recording of this conference call will be available for 7 days on + 44 (0)12 1260 4861 using the access code 0451922 followed by #.

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Notes to editors:

Fenner PLC is a world leader in reinforced polymer technology, providing local engineered solutions for performance-critical applications. The Group operates through two divisions:

Engineered Conveyor Solutions: the ECS division, trading under the Fenner Dunlop, Fenner and Dunlop brand names, is a recognised leader in the global conveying market. The division offers a unique, comprehensive suite of products and services, which serve the conveying needs of mining, power generation and bulk handling markets.

Advanced Engineered Products: the AEP division uses advanced polymeric materials and technical expertise to provide high value-added solutions to customers' most challenging engineering problems. Customers are spread across a variety of end-user segments, including oil & gas and medical which account for some 40 per cent of divisional revenue, together with construction, transportation, automation and general industrial. AEP's trading names are recognised globally and include CDI Energy Products, EGC Critical Components, Hallite, AIP Precision Machining, Fenner Precision, Fenner Drives, James Dawson, Mandals, Secant Medical, Charter Medical and Xeridiem.