London – Fenner PLC has posted a sharp rise in revenue and profits in the first half of 2017 - helped by the group's ongoing restructuring efforts.
Revenue for the six months to end of February rose 11% to £307.4 million, while underlying profit increased 60% to £24 million, compared to the same period last year.
A particular feature of the results, said Fenner on 19 April, was an increase in underlying operating margin which increased to 7.8% from 5.4% in 2016. This, it said, reflected improvements and efficiency gains across many of the group's operations.
Fenner added that within the six-month period, it acquired non-controlling interests in BBCS and LECS conveyor-service businesses located in Australia.
The company’s Advanced Engineered Products (AEP) business unit, which includes sealing technologies, precision polymers and Solesis Medical Technologies, registered a 4% adjusted revenue growth. Underlying operating profit was also up at £17.9 million from £15.5 million the year before.
Improved operational performances, driven by market share gains, new product introductions and cost-control were among the contributing factors.
The company saw “progressive improvements” in the oil & gas industry, albeit from very low levels, during the period.
Fenner's Engineered Conveyor Solutions (ECS) business has been impacted by low mining activity globally. This unit saw a 10% drop in first-half sales to £170.5 million at constant currencies. Underlying operating profit, however, was higher at £10.4 million compared to the same period the previous year.
There was a general improvement in business sentiment due to higher commodity prices and mineral extraction rates in the mining industry. However, Fenner said, “this was not generally reflected in higher orders for replacement belt.”
The increased operating profit, the company added, were generated by “the substantial operating improvements implemented across the business.”
Throughout 2015 and 2016, Fenner launched major restructuring and downsizing activities in its ECS operations globally, including in the UK, China, the US and Australia. The company shifted focus from products to offering solutions in the mining sector in the face of declining mining activities and orders.