(Alliance News) - Flowtech Fluidpower PLC said Tuesday its revenue dropped by double digits in the quarter ended March 31.
Shares in the technical fluid power product supplier closed 14% higher in London on Tuesday at 67.55 pence each.
Total revenue for the three months to March 31 was GBP26.9 million, 10% lower than the GBP30.0 million seen in the same period the year before.
Flowtech's Components unit saw revenue slip 12% year on year to GBP22.9 million, while its Service unit revenue was flat at GBP4.0 million.
Prior to the Covid-19 the lockdown, the company first quarter performance was in line with internal expectations, Flowtech said.
The company continued: "Down on the buoyant conditions seen in early 2019, but with a return to growth in customer order patterns and outlook. However, the final few weeks of the period created an altogether different position going into the second quarter.
"Many of our suppliers and customers suspended operations, although recent indications suggest that some have either already reopened or are planning to reopen in May, albeit with reduced capacity."
At March 31, net debt stood at GBP15.6 million and available banking facilities were GBP25 million.
Flowtech began a restructuring programme in February, transitioning from warehousing and picking operations to "more efficient" centres.
"In the UK we are currently closing four warehousing facilities, the annualised savings from which are estimated to be GBP1.6 million, with a GBP800,000 impact/benefit in 2020. The cash cost of this restructuring is estimated at GBP1.8 million, of which GBP500,000 was incurred in 2019. We are pleased to confirm that this complex and tightly managed project is on time and within budget," added Flowtech.
Looking ahead, the company said the full damage caused by Covid-19 "remains unclear".
Flowtech said: "A significant part of our sales depends on the manufacturing and construction sectors, both of which have seen large scale shutdowns. It is possible that these sectors will begin to reopen during early May, and our current plan is to ensure that we continue to support/service our customers and react as quickly and effectively as possible if this were to happen. However, if there is a need to undertake further cost reductions should the lockdown extend further into the year, we must ensure that we are in a position to initiate change without detriment to our future business and our customers. This being said, the work undertaken as part of our restructuring activities over the past twelve months is helping our planning enormously in this regard."
By Paul McGowan; paulmcgowan@alliancenews.com
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Flowtech Fluid. (FLO)