By Liz White, UT editor
Hessle, UK-Conveyor belting giant Fenner plc reports high sales and revenue rises for fiscal 2006, ending 31 Aug 2006. The group's revenue rose to £379.0 million ($735 million) from £303.6 million in fiscal 2005, "generating an increased operating profit of £33.7 million (2005 £16.3 million, reported chairman Colin Cooke, in a 10 Jan trading statement.
Fenner's profit before taxation rose 136 percent to £29.3 million (2005 £12.4 million) delivering increased basic earnings per share of 13.0p (2005 6.6p), Cooke added.
The Fenner chairman attributed some of these gains to good performance in conveyor belting businesses-"Outside North America" in the opening months. This strength was particularly evident in Australia, "where the strength of our service operations adds to our reputation for quality product and support for our major customers," commented Cooke.
Meanwhile, Fenner took advantage of the "customary seasonal slowdown in North America," towards December to make good progress on improving production efficiency, particularly in Atlanta. Cooke added that, "Significant time has also been invested in strengthening long-term relationships with major target customers." Fenner confidently anticipates benefits from this in its order flow during the second half year, he said.
Fenner added the Wellington group's specialist seals business to its specialist polymer business in mid 2005. Cooke said the polymer unit has "made a promising start to 2007," particularly in the FAST (Fenner Advanced Sealing Technologies, the former Wellington CDI Polytek and Hallite) sealing operations. In the seals operation, "Our initial investment in capital equipment at the recently acquired EGC unit in Houston has resulted in immediate productivity improvements," Cooke continued.
According to Cooke, the continued weakening of the US Dollar and South African Rand reduced "operating profit slightly and borrowings more significantly." But, he pointed out, the disposal of Fenner's non-core 50 percent stake in the South African KSB business offsets this somewhat.
And Cooke showed optimism for the coming trading period: "Our strong trading positions, together with four months of solid performance, lead us to remain confident of a positive outcome for the year." "
