LONDON—Fenner P.L.C. has reported a mild recovery in its oil and gas business, while its hard-hit conveyor belts systems business (ECS) remains under global pressure.
However, the company has remained upbeat that its improvement plans would help it achieve operational efficiencies and market-share gains.
In a trading update on July 13, Fenner said a recent small increase in the U.S. rig count, combined with increased market share, is expected to benefit the oil and gas business of its advanced engineered products operation.
However, given lead times, the effect of this is most likely to be felt in the group's next financial year (starting September).
Following a number of consolidations rounds in the U.K., China and the U.S., ECS' industrial businesses remained stable in those regions.
The U.S. coal industry, however, continues to be challenging and the company is continuing its restructuring and adjusting business model in its North American business.
In Australia, Fenner added, ECS's operational improvements had mitigated on-going pricing pressures from customers in the mining industry.
The U.K.-based group also been impacted by the U.K.'s vote to leave the EU in June and the subsequent fall of Sterling to a 31-year low against the U.S. dollar.
As a result, Fenner's net debt at year end is likely to be above previous expectations.
The depreciation of Sterling, it added, will benefit the translation of the group's overseas earnings, but will have little impact on this year's financial results.