Hydro profits hit by low margin sales
Water treatment firm Hydro International saw profits drop as margins were squeezed and it faced tough comparators from the previous year.
Water treatment firm Hydro International saw profits drop as margins were squeezed and it faced tough comparators from the previous year.
Pre-tax profits came in at £283,000, down from £951,000 in the first half of 2011.
The firm said a shift of sales mix from proprietary products towards lower margin, distributed products was largely to blame for the drop.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Chief Executive Steve Hides said the change in sales mix was often difficult to predict and Hydro's strategy was to mitigate this through further diversification across geographies and a broadening of the company's proprietary product portfolio.
"We anticipate that our full year results will be heavily second half weighted although sales will continue, as in the first half, to include a similar proportion of lower margin distributed products," he said.
Hides added that Hydro's core markets of the US and UK were expected to remain challenging, citing the UK construction industry in particular.
This uncertainty ruffled investors who pushed shares down almost 8% in morning trading following the announcement.
However, the firm remained financially robust and was making good progress with initiatives to underpin future growth for the business, Hides said.
Revenues for the year were up to £15.3m from £13.7m the year before and the company said it would pay no interim dividend.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
RICS: Housing market continues to strengthen but 2025 could be challenging
The latest survey by the Royal Institution of Chartered Surveyors reports a resilient UK housing market, but warns of headwinds next year
By Ruth Emery Published
-
Bitcoin price one of the most-asked questions on Alexa - here's how to buy the cryptocurrency
According to figures from Amazon, which cover September 2023 to November 2024, pop star Taylor Swift and Bitcoin were named among the most popular Alexa queries of 2024
By Chris Newlands Published