Flowtech Fluidpower 2015 Annual Report
Flowtech Fluidpower plc ("Flowtech" or "the Group") is the leading distributor of technical fluid power products to over 3,600 customers in the UK and Northern Europe. With modern distribution facilities in the UK, ROI and Benelux we offer an unrivalled range of both Original Equipment Manufacturer ("OEM") products, as well as our own ranges sourced exclusively to the Group ("Exclusive Brands").
During the year the Group had two operating divisions:
FTUK and FTB operate the same business model in the UK and Northern Europe respectively and focus on supplying distributors and resellers of industrial MRO (maintenance, repair and operation) products, primarily serving urgent orders rather than bulk offerings. The PMC division specialises in the design and assembly of engineering components and hydraulic systems, which are further enhanced by component supply along with a service and repair function. Since the year end a third division, "Process", has been established which will focus on distribution of industrial components to the process sectors. All three divisions have overlapping product sets allowing procurement synergies to be exploited.
The Group has established a key position in the fluid power supply chain. The focus on core competencies within the fluid power market has been central to our continued success and this focus will support our long term strategy. In addition, Flowtech continues to deliver and develop its added value services to support its customers through organic development of its product ranges and acquisition of complementary businesses.
FTUK is based in Skelmersdale, Lancashire, where all Group functions are also located. In Europe, FTB operates from a single site in Deventer in the eastern region of Holland and services customers principally in Holland and Belgium. PMC operates from four sites. Originally established in Knowsley, Merseyside, sites in Lisburn and Dungannon, Northern Ireland and Dublin, ROI were added following the acquisition of the Nelson Fluid Power group ("NFP") in July.
The Group's business is directed by the Board and managed by the Executive Directors, led by the Chief Executive. To support the development and alignment of the Group's business objectives, an Operational Board has been introduced to control and deliver the strategic goals as defined by the plc Board. This Operational Board includes the Managing Director from each business unit as well as the Group's CEO and CFO. This team will maintain a clear focus on developing the business in line with market requirements.
Technical, catalogue based through 3,000 customers
FTB full market including end-users
Hydraulic components, design, power pack build, purifiers, hose assembly and tube manipulation
The Group has two operating divisions: Flowtechnology, geographically split into Flowtechnology UK ("FTUK") and Flowtechnology Benelux ("FTB"); and Power Motion Control ("PMC"). FTUK and FTB operate the same business model in the UK and Northern Europe respectively and focus on supplying distributors and resellers of industrial MRO (maintenance, repair and operation) products, primarily serving urgent orders rather than bulk offerings. The PMC division specialises in the design and assembly of engineering components and hydraulic systems, which are further enhanced by component supply along with a service and repair function. The PMC division's aftersales supplies can be fulfilled by FTUK which offers 99% service levels for next day delivery and ensures facility usage is optimised across the Group. Since the year end a third division, "Process", has been established which will focus on distribution of industrial components to the process sectors.
The divisions are supported by a centralised back office team at the Skelmersdale headquarters and a procurement and quality control team in Shanghai.
'One stop shop' for fluid power products via easy to use web trading systems
Our mix of generic, branded and our exclusive own brand products is unmatched in the market.
High service levels and rapid response times deliver the right products at the right time.
Over 50 years' experience of engineering design and assembly in the hydraulic markets.
Provide site service engineers, scheduled maintenance plans and on site refurbishment.
Our additional services make us integral to our customers' marketing strategies.
Flowtech has a unique position in the market and a diverse customer base.
Our customer centric approach ensures we understand their needs.
Our presence in the Far East and supplier relationships there are accomplished.
Fully integrated IT systems and highly-automated distribution centres.
Our team are highly motivated, with training and development to grow their crucial knowledge and expertise.
Our strong acquisition pipeline and strategy offer potential for further expansion.
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SQ FT MODERN DISTRIBUTION CENTRE
Of orders dispatched in full same day
AVERAGE PICKS PER DAY WITH AN ERROR RATE OF LESS THAN 0.25%
Flowtechnology UK was founded in 1983. It is a highly efficient business unit with a fully integrated end-to-end process delivering high service levels to its marketplace, and a deep stockholding to support its wide and varied customer base.
Flowtechnology Benelux was acquired in 2007. Since 2010 significant restructuring has been undertaken and by 2014 it was fully integrated into the Group's operating systems. The change process has delivered a business with solid foundations which is now establishing a strong reputation in its marketplace.
* Before separately disclosed items and central costs which are shown in the financial statements note 3.
The Group's 80,000 sq.ft. UK distribution hub in Skelmersdale, Lancashire, houses its modern, highly automated distribution, operations centre and support functions. FTUK has a sales and technical support team responsible for order receipt and processing, marketing and business development, procurement, contract services and technical support.
FTB services approximately 900 distributors, resellers and end user customers in Northern Europe. FTB operates from a 20,000 sq.ft. warehouse in Deventer and uses the same integrated IT platform as the UK business, with back office functions provided from the UK.
The Group's Chinese operations consist of a procurement team in Shanghai and a 18,000 sq.ft. logistics centre in Guangzhou. The operation was established in 2014 and is used as a centrepoint for quality control and container load optimisation.
Delivery targets achieved
The PMC division incorporates Primary Fluid Power ("PFP") acquired in 2014 and this year's acquisitions: Albroco and Nelson Fluid Power ("NFP"). The trade of Albroco has been smoothly integrated into the Primary operations whilst Nelson continues to operate independently under local management. All three acquisitions benefit from the synergies created within the Group for procurement and shared support costs.
* Before separately disclosed items which are shown in the financial statements.
PFP's 25,000 sq.ft. facility in Knowsley, Merseyside, houses our 'Centre of Engineering Excellence' as well as sales, technical design, procurement and business development teams. PFP design, manufacture and assemble their own brand products including manifold blocks, valves, tube couplings and adaptors. Quality assurance is controlled with modern CNC technology and product application and testing capability.
NFP has two sites in Lisburn and Dungannon totalling 27,000 sq.ft. housing six hose assembly lines, power pack assembly facilities and warehousing.
NFP has one site in Dublin of 10,000 sq.ft. accommodating one hose assembly line, warehousing and support staff.
Reasons to invest
Our marketplace - Key market trends