London – Fenner PLC has reported a drop in sales and earnings in its engineered conveyor systems (ECS) business, which produces heavy conveyor belts for mining, power generation and bulk handling markets.
In its financial year ending 31 Aug, ECS generated revenue of £400.5 million (€566.5 million) down from 2014’s £455.6 million at constant currencies, Fenner reported 11 Nov.
At constant currencies, underlying operating profit stood at £23.3 million from last year’s £44 million with operating margin down to 5.8 percent from 9.7 percent in 2014.
Shares in the London-based group were down by almost 8 percent near close-of-trading on the day of the results announcement
In a statement, Fenner said that its ECS business faced “another year in which trading conditions in each of its principal markets showed further deteriorations, especially in the US coal industry.”
Fenner has initiated “stringent measures” to reduce costs in view of falling profits.
“ECS continues to address its cost base,” said the statement, adding: “as part of this, there have been significant reductions in manned capacity across ECS's business”.
In a bid to “right-size” its factory capacity to suit medium-term levels of demand Fenner cut jobs at its factories in China and the UK during 2015.
A restructuring is also “on-going in North America,” the statement added.
Over the course of the year, ECS's permanent headcount was reduced by over