3 Min Read
* Orders for conveyor belts improving in Australia
* Newer markets helping to offset weakness in U.S., Russia, Ukraine, UK
* Says yet to benefit from improving trends in U.S. coal industry
* First-half pretax profit falls 32 pct, revenue 8 pct
* Shares rise as much as 6 pct (Adds analyst comment, details, share movement)
April 23 (Reuters) - Fenner Plc, a maker of conveyor belts that has been hit by a slowdown in the global mining industry, said orders were picking up in Australia and in newer markets such as South America, helping to offset weakness in the U.S. coal industry.
Shares of the company, which reported a 32 percent drop in first-half pretax profit, rose as much as 6 percent on the London Stock Exchange on Wednesday.
Fenner said it had yet to benefit from improving trends in the U.S. energy industry, such as rising natural gas prices and reductions in utility coal stockpiles.
However, the company said these trends were expected to lead to an increase in coal production and demand for its products.
"...The (conveyor belt) division should be poised to see improving organic growth across the year," UBS analyst Robbie Capp said in a note to clients.
Fenner has been counting on newer markets such as South America, the Middle East and Africa to make up for weak demand in the United States, Russia, Ukraine and the UK.
Revenue fell 8 percent to 359.8 million pounds the six months ended Feb. 28, with the conveyor belt division accounting for about 65 percent.
Fenner said the division was benefiting from Australia's record shipments of iron ore and coal.
The company also makes polymeric products, ranging from hearing aid parts to components for oil and gas handling equipment. Revenue in this division is expected to improve in the second half, helped improved demand from customers in the oil and gas business, Fenner said.
"Fenner is now seeing more encouraging signals and a recovery looks more likely within the next year..." Investec analyst Michael Blogg said in a note to clients.
Fenner said it would pay an interim dividend of 4 pence per share, up from 3.75 pence last year.
Shares in Fenner, an FTSE-250 component, were up 5.2 percent at 410 pence on the London Stock Exchange at 1140 GMT. (Reporting by Aashika Jain in Bangalore; Editing by Ted Kerr)