Fenner confident of recovery as it reveals a 35pc slide in profits

The Hessle, East Yorkshire-based company has been hit by falling coal prices and fluctuating global demand over the past year.

Pre-tax profits for the six months to February 28 fell from £41.7m to £26.9m.

Revenues fell from £412m to £391m.

Fenner’s chairman Mark Abrahams claimed it was a “robust performance” in a challenging operating environment and against record comparable results last year.

The group reported improving order levels for its conveyor belts in North America, but said pressures continue in Australia where coal prices have fallen.

It said it has seen strong trading elsewhere in the world.

Its advanced engineered products division, which makes products ranging from high-pressure seals to silicone catheters, reported a strong performance at its recently acquired businesses.

The division saw an improvement in activity levels after a quieter start to the year following customer destocking.

Mr Abrahams said: “While, as anticipated, results are below the comparable record performance last year, the first half saw further progress towards our strategic objectives and encouraging evidence of improvement in most of our markets.

“We remain mindful of the continuing global economic uncertainty and ongoing pressures in our Australian business.”

He said better trading elsewhere in the business will lead to an improved performance in the second half.

“We are confident of a return to growth in our 2013/2014 financial year,” he added.

The group said the current trading environment is challenging given the headwinds caused by the world economic situation and country specific problems.

Following what it described as uncharacteristically low demand levels in the second half of last year, its North American conveyor belt business has seen improving order levels.

It expects these orders to be converted into growing revenues in the second half and beyond.

It said the recovery reflects strengthening natural gas prices and reducing gas stock levels, as the US market returns to more normal business dynamics.

The Australian business reported strong trading in the first quarter followed by a more challenging second quarter as a result of lower iron ore and coal prices.

Mr Abrahams said that although iron ore prices are recovering from their low point in 2012, volume and margin pressures will continue in the second half as a result of the normal lag effect.

The group said mining conveyor belt maker Australian Conveyor Engineering, which it bought last November, has performed well.

Mr Abrahams said that “excellent progress” has been made in the emerging markets of Latin America and Africa.

The advanced engineered products division reported a quiet start to the year, following de-stocking.

This impact was largely offset by new applications, emerging markets and the good performance from newly acquired busin- esses.

“Signs of a recovery were evident in the latter months of the second quarter and activity levels are continuing to improve,” said Mr Abrahams.

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