Booming Fenner raises profits by 49pc

Yesterday the conveyor belting specialist said a boardroom reshuffle, which will see a new chairman and chief executive appointed, would help to sustain this growth trend.

Fenner, based in Hessle near Hull, grew underlying pre-tax profits by 49 per cent to 46.3m in the year to the end of August, lifting sales by 11 per cent to 552.5m.

"We've made significant progress throughout the group in all of the markets through market penetration, rather than relying on recovery coming out of the recession," said chief executive Mark Abrahams. "A lot of it is our work and our gains that have contributed to it."

Mr Abrahams is stepping down to non-executive chairman in March, replacing Colin Cooke, who is retiring after 17 years. Fenner's new chief executive will be Nick Hobson, current managing director of its advanced engineered products arm.

Mr Hobson, who has been with the group for more than 20 years, has the "knowledge, experience and skills to take the group to futher success," said Mr Cooke, who is 70.

Mr Abrahams started with Fenner in 1990 as finance director, stepping up to chief executive four years later. He said the group consulted major shareholders and investor body the Association of British Insurers on the boadroom changes.

"Fenner has created a very distinctive culture," said Mr Abrahams. "We have got huge momentum that has been built up and its desperately important.

"Regrettably there comes a time when people have to retire. Therefore the issue for us as a board was what's the best way to maintain that momentum and culture and things that make Fenner distinctive.

"We all agreed that this was the right way to take things forward and make sure that it's safely transitioned into safe hands."

Fenner said 60m of its growth over the year came from new customers and new products. In its advanced engineered products (AEP) arm, Fenner has seen a "continuously improving" trend, with underlying profits up 43 per cent to 22.6m and sales up 18 per cent to 163m.

While Fenner experienced severe customer de-stocking during the recession, where they used up old stock and did not replace it, customers are now re-stocking, particularly in the United States.

One AEP division, its seals business, competes in a market still 15 per cent off the previous peak, said Mr Abrahams. However, Fenner seals itself is five per cent ahead of the previous peak, he said.

Fenner's conveyor belting arm, which was largely unaffected by the global recession, grew underlying profits by 31 per cent to 40.5m with revenues up eight per cent to 389.5m.

Fenner said it had started the new financial year strongly, with all businesses performing well. It upped its total dividend to 7.2p from 6.6p a year ago. Net cash surged by 84 per cent to 66.8m.

Shares gained 4.65 per cent to 281.6p. They have climbed more than 60 per cent over the past year.

FinnCap analyst David Buxton said: "With better-than-expected results and a strong trading outlook signalled we see underlying momentum in the business.

"Equally, with cashflow better than expected and with earnings per share-enhancing acquisitions already made and further to come we still see good opportunities to expand the business. The boardroom changes should not unsettle markets."

Mr Abrahams, 55, is also a non-executive chairman of Yorkshire heating company Inditherm and a non-executive director of Leeds Teaching Hospitals NHS Trust.