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The Group has a clear view of its growth objectives – to create a specialist fluid power organisation that remains focused on its core competences through its delivery of 'class-leading' service and support. Our long-term growth model is based on both organic growth, coupled with complementary acquisitions in the UK and Europe in a very fragmented marketplace.

The successful integration of new businesses into the Group is critical, maintaining momentum and ensuring an ability to continue to trade with their customers seamlessly.

Description

The overall Group brand is positioned as a full-service fluid power provider, which encompasses all our trading businesses.

Brand identity and the ability to maintain and build a strong reputation is critical to our long-term development. For all future acquisitions, brand and reputation will be paramount with the intention to maintain local branding and develop its existing position.

Product brand expansion continues to be a key development area for the Group.

Highlights

  • Rebranding of the Group to further differentiate the corporate brand from the original "Flowtech" business
  • Acquisitions have strong brand identities within their sectors
  • The establishment of a new umbrella brand for PMC; the "Fluidpower Group" which focuses on hydraulic application solutions and technical expertise, providing the customer with a specialist service from a single source
  • Extension of our Global manufacturing partnerships, with the addition of another exclusive own brand "Techmatic"

Priorities for the following year

  • To reposition the plc as an inclusive brand covering the full-service offering to the market and representing four distinct channels
  • Drive the umbrella branding of PMC, the "Fluidpower Group", to deliver complimentary product and service opportunities through the sister businesses, utilising technical expertise and product competence
  • Strengthen the position of each business unit brand by tactical marketing and promotions
  • Building on our relationship with Global brands to continue building our position in the market place, ensuring our customers have access to extended product ranges to cover the wider market sectors

Associated risks

  • Poor communication strategy
  • Lack of clarity of message
  • Failure to integrate and align the strategies of the business model

Description

  • The strategy is to acquire complimentary fluid power businesses operating in specific sectors. Each business being highly focused operations delivering quality customer service.
  • Integration projects are ongoing to streamline processes across the Group to ensure we minimise the administration burden and concentrate on delivering service excellence to our customers.

Highlights

  • Acquisitions have brought substantial new skills, knowledge, access to new markets for fluid power components and talented management teams
  • Six acquisitions were made in 2017 with an additional one in March 2018
  • Continual improvement to Standard Practice Instructions (SPIs) including SPIs for all Group IT policies

Priorities for the following year

  • Continued growth of the Group by strategic acquisitions, adding complimentary businesses to the relevant channels
  • Evaluation of our European acquisition strategy, initially targeted at increasing the Group's presence and scale in the Benelux
  • With the acquisition in March 2018 of Beaumanor, a fluid power catalogue distributor, the Group now has three of the major catalogue houses in the UK. This will allow the Group to drive through a number of synergies and build in business service protection
  • The updated data repository will be utilised to harmonise the product offer across the three businesses, optimising purchasing costs, inventory turnover and increasing overall service levels. This will also reduce customer conflict and improve catalogue production.
  • To maintain business continuity, as part of the disaster recovery plan the Beaumanor facility will be used as the backup logistic centre to Skelmersdale. An evaluation of the system linkage between Beaumanor and Skelmersdale will determine the best route for integration of the warehousing processes

Associated risks

  • Failure to identify suitable acquisitions which add complimentary businesses to the Group
  • Inability to quickly align the warehouse systems between the two logistics centres
  • Inability to quickly align management reporting processes and accounting controls

Description

The Flowtechnology operations have always been innovative in the use of e-commerce with our websites being fully integrated into our ERP systems. With over 70% of customer orders being placed through the website. This model will be rolled out throughout the operating units within the Group.

Business intelligence initiatives create insight which enables us to improve our stock profile and inventory usage and create strong pricing strategies.

Highlights

  • Completion of super server project, allowing hosting of Enterprise Resource Planning (ERP) systems for all business units at the Skelmersdale site, with additional offsite disaster recovery facilities
  • Creation of centralised supplier payments system, providing purchasing intelligence and delivering processing efficiencies
  • Established consistency of IT infrastructure across all sites which allows Group to ensure GDPR compliance.
  • Cyber Essentials accreditation achieved by Flowtechnology UK and Indequip
  • Launch of two newly updated websites, Flowtechnology UK and Indequip

Priorities for the following year

  • Obtain Information Assurance Standard for Medium-Sized Enterprises (IASME) Gold certification for the Skelmersdale site and replicate best practice to achieve Cyber Essential accreditations across all UK business units
  • Develop reporting in Sage X3 to consolidate data from multiple ERP systems across the businesses
  • Evaluate operating systems across the catalogue distribution businesses, to deliver an integrated ERP solution, maintaining the existing e-commerce platform

Associated risks

  • Inability to recognise cyber exposure
  • System and site disruption
  • Lack of planning

Description

We aim to be positioned as a full-service provider for fluid power products and services. The ongoing expansion of ranges and brands will see the Group create increasing opportunity for a larger percentage of customer spend and open up new opportunities in the wider market.

The Group nurtures its relationships with OEM suppliers while continuing to develop its complementary exclusive brands.

Highlights

Acquisitions have given us extended ranges across many of our major product groups;

  • HTL – bespoke mobile valve assemblies
  • Hi-Power – heavy duty automated greasing systems and bulk discharge equipment
  • Orange County – specialist piping and monitoring systems
  • Hydroflex – Bespoke hydraulic hose assembly for Benelux
  • Group HES – Parker large bore piping, Danfoss range, bespoke gear boxes and axles
  • Beaumanor – Catalogue based distribution business with international supply line

Priorities for the following year

  • To increase access to new product ranges and technical knowledge through the integration of the acquisitions
  • To develop a schedule of supplier visits by the Strategic Buying team to evaluate both new and existing suppliers, focused on price and performance, and to monitor a continuous improvement program
  • To create closer partnerships with specific large OEM manufacturers, developing a more collaborative approach to the market place

Associated risks

  • Lack of quality control
  • Inability to influence and build supplier relationships
  • Lack of cost focus

Description

We have built long-term partnerships with our suppliers and quality logistics companies, enabling us to provide the pace of responsiveness our customers demand.

The Flowtechnology businesses consistently achieve our service level targets of 99.5% of orders delivered next day. This is underpinned by our strategy in product, sourcing and sound inventory management.

Where acquired businesses include a catalogue distribution operation they will be linked into the distribution segment to provide synergy opportunities and savings.

Highlights

  • Restructure and refurbishment of main logistics centre, increasing capacity and creating scope for future expansion
  • Supply chain proactively introduced leaner stock management practices including; economic quantity ordering, more frequent stock turnover, working with suppliers to pack goods in a more efficient way for stock replenishment, prioritising arrivals of stock
  • Supplier account managers appointed to build collaborative relationships
  • CIPS qualification training started to support best practices

Priorities for the following year

  • Optimise Group purchasing activities to deliver cost savings by utilising economies of scale, rationalising the supplier base, consolidating stockholding into the main logistics sites and reducing carriage costs
  • Evaluate and implement procurement planning software across the catalogue distribution businesses in the UK and Europe, to deliver an integrated approach
  • Major brand evaluation, support, lead times, system linkages and partnership opportunities

Associated risks

  • System and site disruption
  • Lack of competent employees
  • Inability to influence business

Description

People are one of our strongest assets. As well as recruiting new talent, we acquire companies who recognise the importance of their workforce and share our values of continuing strong traditions.

Investing in our management teams brings the benefits of improved retention and talent identification for succession planning. We see training and development of employees as key to our long-term success.

Highlights

  • Nick Fossey appointed regional MD UK & Ireland, Mark Richardson appointed regional MD Benelux
  • Five new appointments to the Operational Board; Alan Willis, HTL, Maurice Kearney, Hi-Power, Leo Voogd, Hydroflex, Chris Way, Group HES and Stuart Diesel, Onsite Services division
  • As part of the Beaumanor acquisition in March 2018, Mark Cropper, Beaumanor and Mark Venn, Derek Lane & Co have joined the Regional Board
  • Apprenticeship programmes are in place at Primary Fluid Power, FTUK, Group HES, Orange County and Hi-Power. Five apprentices have been retained within the Group.
  • Croner support in health and safety at nine sites, working to develop consistent procedures and policies Group-wide

Priorities for the following year

  • Set up a Group Business Development team to work across the Group to develop new business opportunities
  • To maintain an open culture within the business, encouraging and valuing opinions
  • Training programs on the SPIs to reduce administration processing costs and improve the visibility and control of local business costs
  • Continued employee evaluation processes to develop talent from within the organisation

Associated risks

  • Lack of open debate and discuss
  • Talent management and succession planning