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Fenner profits fall flagged already

Weak mining currencies have hurt Fenner, but the underlying business remains sound
April 17, 2014

Don't expect fireworks when conveyor belt engineer Fenner (FENR) unveils first-half results on Wednesday 23 April. It said last month that a slump in mining currencies, such as the Australian and Canadian dollars and the Chilean peso, will cut profit for the six months to 28 February. Analysts trimmed forecasts, but Fenner hinted at a better second half and full-year numbers at constant exchange rates should, at least, generate "modest growth".

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Improving demand in Australia is already benefiting Fenner's core conveyor belt division, largely the result of higher iron ore and coal volumes there. True, low commodity prices are making coal miners nervous, but rising consumption and shrinking stockpiles in the US should help Fenner in the months ahead. Elsewhere, a buoyant oil and gas industry is good for the smaller engineered products business, although order deferrals mean the typically stronger second half must generate more profit than usual.