Shares in Flowtech Fluidpower (AIM:FLO) fell 9% to 59.05p after the group said full-year earnings would come in below market expectations and confirmed it plans to raise fresh equity to fund an acquisition in the Netherlands.
The industrial engineering group said underlying EBITDA for the year to December is expected to be about £7.7 million on revenues of £116.9 million.
That is broadly in line with management’s own expectations but below prior consensus forecasts of £8.4 million, with the shortfall blamed on a small number of large projects slipping from the fourth quarter into early 2026.
While the board pointed to improving momentum in the second half, with EBITDA rising from £3.5 million in the first half to £4.2 million in the second, investors appeared more focused on the gap to forecasts and the caution struck on the outlook.
Flowtech said UK market conditions remain difficult and warned that higher national minimum wage costs are likely to add pressure to overheads.
Alongside the trading update, Flowtech announced the acquisition of Q Plus, a Dutch specialist in pneumatics and compressed air systems.
The deal is intended to double the size of its Benelux business and strengthen its European footprint. Q Plus generated €12.5 million of revenue in 2024 and is expected to deliver €1.9 million of adjusted EBITDA in 2025.
The purchase price implies an EBITDA multiple of between 4.6 and 5.5 times, which Flowtech described as attractively priced.
However, the cash element of the deal will be funded through a placing at 53p, well below the previous closing share price, with proceeds also earmarked to reduce debt.