Flowtech’s FY25: Second-half momentum, a small miss, and a bigger European footprint
Flowtech Fluidpower has delivered a mixed but improving FY25 update and announced the acquisition of Q Plus in the Netherlands. Underlying EBITDA for FY25 is expected to be around £7.7 million on revenues of £116.9 million. That is slightly below prior consensus (EBITDA £8.4 million, revenue £117.9 million), largely due to a few large projects slipping from Q4 2025 into Q1 2026.
The more important signal is acceleration in H2: EBITDA rose from £3.5 million in H1 2025 to £4.2 million in H2 2025, with like-for-like growth flipping from -11.9% in H1 to +7.6% in H2. Management says that momentum has carried into early 2026, backed by a stronger pipeline, a bigger orderbook, and stable gross margins.
Key FY25 numbers at a glance
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | £116.9m | £107.3m | +£9.6m (+8.9%) |
| Underlying EBITDA | £7.7m | Not disclosed | Below consensus (£8.4m) |
| Net debt (ex IFRS 16) | £15.4m | £15.1m | +£0.3m YoY; £3.1m better than end H1 25 |
Regional revenue mix shows GB strength
| Region | FY25 (£m) | FY24 (£m) | Change |
|---|---|---|---|
| Great Britain | 84.8 | 75.9 | +8.9 |
| Island of Ireland | 22.7 | 21.4 | +1.3 |
| Benelux | 9.5 | 10.0 | -0.5 |
Excluding acquisitions, like-for-like revenue was down 3.0% for the year, reflecting a weak H1 and an improving H2. Underlying EBITDA refers to earnings before interest, tax, depreciation and amortisation, adjusted for non-underlying items.
Self-help is showing through: margins, costs and cash
Management points to sustained, stable gross margins and tight cost control. In 2025, excluding acquisitions, operating overheads fell by 6% and working capital by 11%. Net debt ticked up modestly year-on-year to £15.4 million, but improved by £3.1 million versus end H1 2025. The company expects stronger cash conversion ahead as capital investment moderates and the growth initiatives bed in.
Four self-help drivers are cited as moving in the right direction: a new website driving better traffic and customer acquisition, expanded supplier agreements and ranges, a +20% increase in the engineering projects orderbook as at January 2026 versus last year, and strong revenue with positive EBITDA from three recent UK acquisitions.
Q Plus acquisition: stepping up in Benelux pneumatics
Flowtech will acquire Q Plus B.V. and Naili Europe B.V. in the Netherlands, one of the largest independent specialists in pneumatics, compressed air and vacuum solutions. Q Plus brings around 30 FTEs, more than 8,000 products and roughly 1,800 customers, with particular strength in OEM and machine building.
- FY2024: €12.5 million revenue, €1.0 million profit before tax, €6.7 million gross assets.
- FY2025 expectation: €12.9 million revenue and €1.9 million adjusted EBITDA.
- Enterprise value: €9.25 million (c. £8 million), implying 4.6x (2025) to 5.5x (2024) adjusted EBITDA.
- Consideration to seller: €5,869,000 comprising €4,119,000 cash, €1,250,000 vendor loan and up to €500,000 earn-out.
- Repayment of intercompany debt at completion: €1,955,794.
Strategically, this should roughly double Flowtech’s Benelux business and position it as a market leader in pneumatics and compressed air locally. Post-deal, pro-forma Benelux revenues are expected to be £21 million, with £15 million from pneumatics. Management sees multiple synergy levers across headcount, warehouses, assortment and pricing, and cross-selling into OEM and machine builders.
How the deal is funded: placing and retail offer at 53p
The cash element will be funded via a placing at 53 pence per share to raise around £9 million gross, alongside a retail offer of up to £1 million. The fundraising will also help pay down part of the Group’s debt, which should improve leverage and financial flexibility. The placing is not underwritten.
Conditions matter here. The only condition for completing the acquisition is shareholder approval of the resolutions. The fundraising requires those resolutions and other conditions. If the placing does not proceed, the retail offer would not proceed, and the acquisition would need alternative funding. The expected timetable indicates completion by no later than 16 February 2026, shortly after admission targeted for 9 February 2026.
Why this update matters for investors
Positives: momentum, discipline and a sensibly priced bolt-on
- Second-half momentum is clear, with like-for-like growth in H2 and higher H2 EBITDA versus H1.
- Gross margins are stable and overheads are down, with working capital tighter. That sets up better cash conversion in 2026.
- Orderbook strength (+20% in engineering projects as at January 2026) supports near-term trading.
- Q Plus looks attractively priced at 4.6x to 5.5x adjusted EBITDA, earnings enhancing and strategically on point in pneumatics and compressed air.
- Pro-forma Benelux scale to £21 million revenue adds weight to the European strategy.
Watch-outs: small miss, UK headwinds and integration execution
- FY25 is just shy of consensus on both revenue and EBITDA, albeit with some timing effects into Q1 2026.
- Management remains cautious on the UK market near term and flags the national minimum wage increase as a cost headwind.
- The placing is not underwritten and will be dilutive to existing holders. The RNS does not disclose the number of new shares or anticipated dilution.
- Integration risk is real, even with recent M&A successes. Synergies will need disciplined execution to land in EBITDA and cash.
My take: a credible shift from fix to build
Flowtech looks to be turning the corner from a transformation story to a growth platform. The self-help measures are feeding through to margins and cash discipline, and H2 delivered a cleaner run-rate. The Q Plus acquisition adds a high-quality European specialist at a sensible multiple, with obvious cross-sell and cost opportunities.
The trade-off is short-term dilution and ongoing macro caution in the UK. If management executes on integration and the orderbook converts as indicated, leverage should improve and the enlarged Group should have better earnings resilience. For investors, this is a classic case of near-term funding noise in exchange for higher-quality, more scalable earnings in continental Europe.
What to watch next
- Shareholder vote on the fundraising and acquisition resolutions on 6 February 2026.
- Admission targeted for 9 February 2026 and acquisition completion by no later than 16 February 2026.
- Early 2026 trading: conversion of the larger orderbook and any update on gross margins.
- Cash conversion and net debt trajectory through H1 2026 as capex eases.
- Initial integration milestones at Q Plus, including warehouse, assortment and cross-sell plans.
Bottom line: a modest miss, but better run-rate dynamics and a well-priced European bolt-on tilt this update to the positive side. Delivery on cash and synergies will be the proof point in 2026.
