Fenner reports flat business in third quarter

London – Fenner PLC has reported a mild recovery in its oil & gas business, while its hard-hit conveyor belts systems business (ECS) is still under global pressure.

However, the company has remained upbeat that its improvement plans would help it achieve operational efficiencies and market-share gains.

In a trading update on 13 July, the Fenner said that a recent small increase in the US rig count, combined with increased market share, is expected to benefit the oil & gas business of its advanced engineered products (AEP) operation.

However, given lead times, the effect of this is most likely to be felt in the group's next financial year (starting September).

Following a number of consolidations rounds in the UK, China and the US, ECS's industrial businesses remained stable in those regions.

The US coal industry, however, continues to be challenging and the company is continuing its restructuring and adjusting business model in its North American business.

In Australia, Fenner added, ECS's operational improvements had mitigated on-going pricing pressures from customers in the mining industry.

The UK-based group has also been impacted by the UK’s vote to leave the EU in June and the subsequent fall of Sterling to a 31-year low against the US dollar.

As a result, Fenner’s net debt at the year-end is likely to be above previous expectations.

The depreciation of Sterling, it added, will benefit the translation of the group's overseas earnings, but will have little impact on this year’s financial results.

Company shares were up 2.1 percent at £1.69 on 13 July - but still far below their £5 peak in February 2014.