Flowtech warns investors that 'growth may be softening'

18th Sep 2018 13:36

(Sharecast News) - Flowtech Fluidpower warned investors on Tuesday that contract delays could mean that "growth may be softening".The AIM-listed firm revealed that delays to a £1.5m contract for the Thames Tideway meant that revenues from the project would now be realised in 2019, pushing operating profit "marginally below market expectations" for the current trading year.Revenues rose 65% to £56m on the back of fresh acquisitions, but Flowtech's underlying operating profits improved by only 26% to £5.7m as its operating margin falling from 13.1% to 10.1% during the period.Net debt on the other hand more than doubled, increasing by 114% to £18m.Flowtech's non-executive chairman Malcolm Diamond said: "Whilst recent trading has remained positive, there are some signs, particularly in some engineering businesses, that growth may be softening. As such, while we remain confident in the prospects for the future growth in both our markets and the enhancement our coordinated activities will bring, we are cautious about prospects in the short term until clarity is achieved on the post - Brexit UK economy."Elsewhere, Flowtech revealed that after nine years, chief executive Sean Fennon will retire from the board at the end of the year. Fennon will be replaced by current CFO Bryce Brooks, who will, in turn, be replaced by former Baker Tilly partner Russell Cash.As of 1420 BST, Flowtech shares had sunk 28.40% to 121p.