Fenner plc : Pre-Close Trading Statement

11 March 2014

Fenner PLC ("Fenner")
Pre-Close Trading Statement

Fenner today provides an update on trading for the six months ended 28 February 2014. The Group expects to report its half year results on 23 April 2014.

The Group's results for the period ended 28 February 2014 will, as previously indicated, be below those for the first half of its previous financial year but the Board anticipates that, in constant currency terms, the outcome for the year as a whole will show modest growth compared with the previous year.

ECS's trading results for the first half of the year were in line with management expectations albeit, as previously indicated, below the first half of last year on a constant currency basis, largely reflecting the very strong trading in Australia in the first quarter of that year.

In Australia, ECS is seeing improving demand for its products, assisted by continued high levels of iron ore and coal extraction, which is being reflected in higher order books.

Amongst ECS's coal mining customers, sentiment generally remains cautious, reflecting low commodity prices. In the second half of the year, ECS's business is expected to see some benefit from higher levels of coal consumption and generally lower US coal stock piles, although the Group remains mindful of the potential impact of corporate activity in North America and uncertainty in the Ukraine.

AEP's performance during the period has been encouraging, particularly amongst those of its businesses which serve the oil and gas industry, as it has continued to make progress towards the strategic objectives for the development of its businesses globally. As previously indicated, AEP's result for the first half reflected certain customer sales being deferred from the first half of the year, which are now expected to be made up in the second half of the current year or in the following financial year, as well as the Group's incremental revenue investment in both human capital and innovation to underpin the continuation of the strong organic growth achieved in recent years in this division.

Overall, AEP is expected to make progress in constant currency terms in its seasonally stronger second half, which is anticipated to have a slightly higher weighting of revenue and operating profit than in recent years.

Since Fenner's interim management statement in January 2014, sterling has seen relatively modest movements against all the major currencies in which the Group's revenues are generated. Translation of the Group's results for its financial year ended 31 August 2013 using average current rates would have reduced underlying operating profit by £8.7 million to £92.8 million and underlying earnings per share by approximately 2.6 pence to 27.5 pence.

The Group's financial position remains strong. The Group expects to report net borrowings at 28 February 2014 of circa £135 million (£172 million as at 28 February 2013, equivalent to £154 million using exchange rates prevailing on 28 February 2014).

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Notes to editors:

Fenner PLC is a world leader in reinforced polymer technology, providing local engineered solutions for performance-critical applications. The group operates through two divisions:

Engineered Conveyor Solutions. The ECS division, trading under the Fenner Dunlop, Fenner and Dunlop brand names, is a recognised leader in the global conveying market. The division offers a unique, comprehensive suite of products and services, which serve the conveying needs of mining, power generation and bulk handling markets.

Advanced Engineered Products. The AEP division uses advanced polymeric materials and technical expertise to provide high value-added solutions to customers' most challenging engineering problems and to identify and develop new opportunities. Customers are spread across a variety of end-user segments, including oil & gas and medical which account for some 40 per cent of divisional revenue, together with construction, transportation, automation and general industrial. AEP's trading names are recognised globally and include Hallite, CDI Energy Products, EGC Critical Components, AIP, Fenner Precision, Fenner Drives, James Dawson, Mandals, Secant Medical and Xeridiem.