Strong results from Fenner give lift to shares

Shares in the Hessle-based company rose by 3.5 per cent, a rise of 7.5p to 218.2p, after it reported a strong performance in the final two months of its financial year and said it is confident for 2011.

The company, which makes belts for the mining industry, said it anticipates a significant year-on-year increase in operating profits. New products and its investment programme should boost margins in 2011.

Fenner is expected to post full year pre-tax profits of between 35m and 45m, with the consensus at 43m.

Demand from companies extracting coal has helped to underpin its performance.

"Our acquisitive growth programme remains ongoing and is expected to yield incremental benefits in the current year," said chief executive Mark Abrahams.

Analysts at Brewin Dolphin, who rate the stock a 'buy', upgraded their 2010 and 2011 forecasts by five per cent after what they called a "strong statement".

"Perhaps the most striking number in the statement is net debt," they said in a note. "It is expected to be less than 115m which is some 15m ahead of our expectations."

They added that the company is likely to start making acquisitions in the coming months. Fenner is keen to expand its medical business to tap into the rapidly-growing minimally invasive surgery market. It entered the medical market in 2008.

In July Fenner said revenues and profits were "well ahead" of last year after third-quarter results were boosted by a recovery in US industrial markets. Fenner said trading across the whole group has continued to show the strong growth seen during the second quarter.