Fenner says US market is picking up

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CONVEYOR belting giant Fenner said weak order numbers from the US coal market have been offset by strong demand in other regions.

The Hessle-based company said there are early signs that US coal stockpiles are returning to more normal levels.

A warm winter and the low cost of shale gas have hit US demand for coal.

Fenner said it has made solid progress over the past five months with revenues and earnings inline with expectations.

The group said it is forging ahead with its capital investment programmes, which will bring extra capacity to its Dutch and Australian operations by next spring.

Analyst Ben Bourne at Liberum capital said: “Since March, the group has continued to make solid progress with revenue and earnings in line with expectations.

“The Conveyor division continued to operate at high levels of utilisation and operating margins were in line with previous run rates.

“Weak order rates from the US coal market, due to the warm winter and uneconomic shale gas pricing, has been offset by strong demand in other regions. The Advanced Engineered Products division has performed in line.”

Analyst David Buxton at FinnCap added: “We maintain our forecasts and believe the shares represent good value, having been heavily sold-off over recent months partly over US coal fears, which now appears to be abating. In this respect we see today’s announcement as encouraging.”