- Email: [email protected]
GUD AHEAD OF TARGET, EYES ACQUISITIONS
NOVEMBER 2002 ISSN 1359-6128 www.worldpumps.com
NEWS
FLOWSERVE CUTS Q3, FULL YEAR GUIDANCE Flowserve Corp has lowered its 2002 earnings estimates to US$0.30–US$32 for the third quarter and US$1.45–US$1.55 for the full year, excluding special items, which relate to the May 2002 acquisition of the Invensys Flow Control Division (IFC). Earlier the company had guided US$0.38–US$0.43 for the third quarter and US$1.70–US$1.90 for the full year. Flowserve blamed market conditions including the unanticipated further deterioration of typically higher margin book-and-ship, or quick turnaround, business, especially in the chemical, power, and general industrial sectors, and an unfavourable mix of lower margin project business. “While I am disappointed to reduce our earnings estimates, I am pleased to report that we plan to repay about US$85 million–US$90 million of debt, which includes an optional repayment of about US$70 million, at the end of the third quarter,” said Flowserve CEO Scott Greer. “In some of our end-markets, particularly upstream petroleum and water, book-
ings have held up,” Greer added. “Additionally, I remain optimistic about the company’s prospects for 2003 and beyond. We are continuing to make important progress in strengthening the company’s balance sheet and operational processes. That said, we are not comfortable at this point projecting more than marginal earnings improvement in 2003, unless markets start to improve. And, we believe they will.” Separately, the company upped its annual synergy savings estimates from the IFC acquisition to US$15 million–US$20 million, from US$10 million–US$15 million, as the integration progresses.
COMMENT Flowserve shares plunged to a 52-week low of US$7.58 after the company slashed its earnings estimates. While Flowserve shares - currently trading at US$9.54 - have made gains, a rebound in the share price is unlikely until the company’s long term prospects improve. ■
GUD AHEAD OF TARGET, EYES ACQUISITIONS
CARDO FREES UP CAPITAL FOR PUMP EXPANSION
GUD Holdings Ltd’s first quarter trading performance for the 2003 financial year is tracking ahead of budget and ahead of last year, on all major financial measures. Speaking at his last annual general meeting before his retirement, GUD chairman Russell Fynmore said that the Australian company’s trading which includes Davey Pumps has exceeded targets in all businesses and that the results have provided a strong platform for performance improvement across the full year. Fynmore said that Davey Pumps’ ability to grow in the near future will only be limited by its internal potential to generate new products. The Australian pump manufacturer now operates with all manufacturing and head office functions in one efficient building in the Caribbean Gardens industrial estate at Scoresby, Victoria (see Pump Industry Analyst, September 2001). GUD managing director Ian Campbell said that the group was now in the enviable position of having the financial freedom to seek acquisitive growth, but stressed that GUD Holdings’ approach to acquisitions would be both sensible and value creating.
Cardo has completed the sale of its Cardo Rail business to Vestar Capital Partners (see Pump Industry Analyst, August 2002). The SKr2 billion selling price for the company free from debt, generates a tax-free capital gain of approximately SKr345 million. “I am very pleased that we have now closed the sale of Rail. We are gaining a strong balance sheet and freeing up capital for an expansion in Door and Pump, which both operate in sectors with considerable aftermarket potential and good growth opportunities via acquisitions,” says Cardo’s president and CEO Kjell Svensson. After the sale, Cardo is estimated to have net liquid funds of approximately SKr500 million and an equity ratio of slightly more than 60%. In January this year Cardo Pump added Finland’s Nopon Oy, a leading manufacturer of biological wastewater treatment aeration products, with a turnover of approximately SKr120 million and 65 employees. Cardo Pump also acquired Swedmeter AB, one of Scandinavia’s leading companies in the field of control engineering for water treatment processes etc. Swedmeter has a turnover of approximately SKr30 million and employs 26 people.
CONTENTS NEWS 1,12,13,16 MARKET PROSPECTS 2-4 COMPANY PROFILE 5-6 COMPANY WATCH 7-9 PEOPLE 10 ORDERS 10 NPD 11 DIVIDENDS 11 IN BRIEF 11,13 E-BUSINESS 12 MARKET REPORT 14 ECONOMIC REVIEW 14 DIARY 15 ISSN 1359-6128/02/$22.00 © 2002 Elsevier Science Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Science Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.
NEWS
FLOWSERVE CUTS Q3, FULL YEAR GUIDANCE Flowserve Corp has lowered its 2002 earnings estimates to US$0.30–US$32 for the third quarter and US$1.45–US$1.55 for the full year, excluding special items, which relate to the May 2002 acquisition of the Invensys Flow Control Division (IFC). Earlier the company had guided US$0.38–US$0.43 for the third quarter and US$1.70–US$1.90 for the full year. Flowserve blamed market conditions including the unanticipated further deterioration of typically higher margin book-and-ship, or quick turnaround, business, especially in the chemical, power, and general industrial sectors, and an unfavourable mix of lower margin project business. “While I am disappointed to reduce our earnings estimates, I am pleased to report that we plan to repay about US$85 million–US$90 million of debt, which includes an optional repayment of about US$70 million, at the end of the third quarter,” said Flowserve CEO Scott Greer. “In some of our end-markets, particularly upstream petroleum and water, book-
ings have held up,” Greer added. “Additionally, I remain optimistic about the company’s prospects for 2003 and beyond. We are continuing to make important progress in strengthening the company’s balance sheet and operational processes. That said, we are not comfortable at this point projecting more than marginal earnings improvement in 2003, unless markets start to improve. And, we believe they will.” Separately, the company upped its annual synergy savings estimates from the IFC acquisition to US$15 million–US$20 million, from US$10 million–US$15 million, as the integration progresses.
COMMENT Flowserve shares plunged to a 52-week low of US$7.58 after the company slashed its earnings estimates. While Flowserve shares - currently trading at US$9.54 - have made gains, a rebound in the share price is unlikely until the company’s long term prospects improve. ■
GUD AHEAD OF TARGET, EYES ACQUISITIONS
CARDO FREES UP CAPITAL FOR PUMP EXPANSION
GUD Holdings Ltd’s first quarter trading performance for the 2003 financial year is tracking ahead of budget and ahead of last year, on all major financial measures. Speaking at his last annual general meeting before his retirement, GUD chairman Russell Fynmore said that the Australian company’s trading which includes Davey Pumps has exceeded targets in all businesses and that the results have provided a strong platform for performance improvement across the full year. Fynmore said that Davey Pumps’ ability to grow in the near future will only be limited by its internal potential to generate new products. The Australian pump manufacturer now operates with all manufacturing and head office functions in one efficient building in the Caribbean Gardens industrial estate at Scoresby, Victoria (see Pump Industry Analyst, September 2001). GUD managing director Ian Campbell said that the group was now in the enviable position of having the financial freedom to seek acquisitive growth, but stressed that GUD Holdings’ approach to acquisitions would be both sensible and value creating.
Cardo has completed the sale of its Cardo Rail business to Vestar Capital Partners (see Pump Industry Analyst, August 2002). The SKr2 billion selling price for the company free from debt, generates a tax-free capital gain of approximately SKr345 million. “I am very pleased that we have now closed the sale of Rail. We are gaining a strong balance sheet and freeing up capital for an expansion in Door and Pump, which both operate in sectors with considerable aftermarket potential and good growth opportunities via acquisitions,” says Cardo’s president and CEO Kjell Svensson. After the sale, Cardo is estimated to have net liquid funds of approximately SKr500 million and an equity ratio of slightly more than 60%. In January this year Cardo Pump added Finland’s Nopon Oy, a leading manufacturer of biological wastewater treatment aeration products, with a turnover of approximately SKr120 million and 65 employees. Cardo Pump also acquired Swedmeter AB, one of Scandinavia’s leading companies in the field of control engineering for water treatment processes etc. Swedmeter has a turnover of approximately SKr30 million and employs 26 people.
CONTENTS NEWS 1,12,13,16 MARKET PROSPECTS 2-4 COMPANY PROFILE 5-6 COMPANY WATCH 7-9 PEOPLE 10 ORDERS 10 NPD 11 DIVIDENDS 11 IN BRIEF 11,13 E-BUSINESS 12 MARKET REPORT 14 ECONOMIC REVIEW 14 DIARY 15 ISSN 1359-6128/02/$22.00 © 2002 Elsevier Science Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Science Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.