Fenner suffers drop in revenue and profit

ENGINEERING company Fenner has reported a fall in full year revenue and underlying operating profit, but said it had the ability to resume growth when markets improve.

The Hessle-based company has been hit by a fall in demand for its conveyor belts from coal customers who are themselves having to deal with a fall in coal exports. In the year ended August 31 2015, group revenue decreased by nine per cent to £666.7m, while the underlying operating profit decreased by 29 per cent to £56.4m.

Nicholas Hobson, the chief executive, said: “The group has faced difficult trading conditions in some of its key markets.

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“We have responded by rigorous control of costs and the close management of cash and working capital, whilst still maintaining our ability to resume growth when market conditions allow.

“Trading in the majority of the group remains in line with management expectations. However, in the light of the recent further deterioration in the US coal industry, the board envisages that the group is likely to achieve an outcome for the current financial year which is moderately below its previous expectations.”

Fenner operates through two divisions, Advanced Engineered Products (AEP) and Engineered Conveyor Solutions (ECS). In 2015, ECS faced another year in which trading conditions in each of its principal markets showed further deteriorations, especially in the US coal industry, Fenner said in statement.

In China, ECS performed well in the first half of the year, but saw much reduced activity in the second half as order intake from its principal coal mining customers was “much reduced”.