* Defers advanced polymeric materials sales
* Sees subdued demand from coal miners
* Shares fall as much as 6 percent
By Aashika Jain
March 11 Fenner Plc said its
half-yearly results were hit by a delay in sales of advanced
polymeric materials, compounding the effects of subdued demand
for industrial conveyor belts.
Fenner's shares fell as much as 6 percent, making the stock
one of the top percentage losers on the FTSE-250 Midcap Index
Fenner, which will report first-half results on April 23,
said its half-year results would be below those for the first
half of its previous financial year but the full year would show
modest growth in constant-currency terms.
In a trading update for the six months ended Feb. 28, Fenner
said some sales from its advanced engineered products (AEP) unit
would be deferred to the second half of the current financial
year or next year. The company's financial year ends on Aug. 31.
A company spokesman said the deferrals were mainly in the
oil and gas industry and were related to customer issues, not
the components that the company supplies.
The AEP unit, which contributes about 40 percent of Fenner's
revenue, makes polymeric products ranging from hearing aid parts
to components for wind turbines.
Fenner's larger unit, which makes conveyor belts for
industries such as coal and iron ore mining, generates 60
percent of the company's total revenue.
The company said it was "mindful" of consolidation amongst
makers of heavyweight conveyor belts.
The spokesman noted the recent acquisition of U.S. rubber
products maker Veyance Technologies by Germany's Continental AG
, as well as ownership changes at a number of U.S. coal
Investec analyst Michael Blogg said in a note that the
Veyance-Continental deal could change the competitive dynamics
in some of Fenner's major markets.
Veyance-Continental will control about 35 percent of the
world's industrial conveyor belt demand once the deal is
completed, Jefferies analyst Andy Douglas said in a note last
month. Fenner has about 20 percent.
Fenner, based in Hessle, East Yorkshire, generates 97
percent of its revenue from outside of the UK and about 50
percent of the revenue comes from the United States.
FinnCap analyst David Buxton cut his rating on the company's
stock to "hold" from "buy", citing additional operating costs
expected in the AEP unit that would affect short-term margins.
Shares of Fenner were down 5.4 percent at 421 pence on the
London Stock Exchange at 1321 GMT.