Fenner PLC Regulatory News (FENR)

22 July 2015

Fenner PLC

("Fenner" or "the Group")

Trading Update

Fenner presents its scheduled trading update covering the period since the end of the first half of its financial year on 28 February 2015.

During the period, AEP's industrial, medical and other non-oil businesses, which represent more than two-thirds of AEP's revenue, continued to perform well as a result of stronger demand and new business wins. Secant Medical has completed the first phase of its major facility consolidation as planned and integration of Charter Medical is proceeding on schedule.

AEP's principal businesses serving the oil/gas sector experienced reduced order intake from February which, as anticipated, impacted trading results from April onwards to an extent consistent with movements in industry metrics. Demand for Mandals hoses used in hydraulic fracturing has remained at very low levels.

Demand levels for ECS products and services in North America are reflecting sequentially lower production levels in the coal mining industry, the impact of which is being partially offset by good progress and generally improving demand from the bulk materials sector. In APAC, ECS has continued to see volume and price declines as the mining industry responds to the deteriorating outlook for commodities. ECS's trading in EMEA has also remained under pressure.

We continue to restructure and re-align our engineering, manufacturing and service capabilities to focus on segments of the conveyor market which value the efficiency improvements possible through adoption of our integrated solutions model. As part of this process, various resources, previously engaged on new customer capacity, are being re-focused on the aftermarket. In addition, the previously announced downsizing of ECS's UK workforce has been completed and similar measures were recently implemented in China.

Balance Sheet and Financing

During the period, the Group's net debt has remained in line with expectations, reflecting the increased focus on the Group's working capital. In addition, capital expenditure is being maintained within the range previously indicated.

Outlook

Leading indicators in the mining and energy industries are not yet showing any signs of recovery and we anticipate the recent challenging market conditions will continue. Nevertheless, we remain encouraged by the focussed way in which the ECS and oil and gas businesses are responding to cost management initiatives.

We expect the strong performance by the industrial, medical and other non-oil businesses within AEP to continue for the remainder of the year and we anticipate that, for AEP as a whole, the outcome for the year will be in line with previous management expectations.

However the recent developments in ECS's businesses will result in full year Group earnings, after recognising a lower tax rate, being slightly below previous management expectations.

Cash exceptional costs in the current financial year arising from our programme to restructure and refocus our business are expected to remain in line with previous guidance at below £10m.

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Analyst and Investor conference call

A conference call for analysts and investors will be held at 8:00 a.m. (UK time) today to discuss this statement. Participants can join the call on 020 3059 8125 (international dial-in + 44 20 3059 8125). A recording of this conference call will be available for 7 days on 0121 260 4861 (in the United States dial 1 866 268 1947 and in all other international locations dial + 44 121 260 4861) using the access code 1382682 followed by #; a replay facility will also be available through the company's web-site www.fenner.com.

For further information please contact:

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:

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, medical, 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

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.