Expansion of internet shopping boosts FKI

FKI last week highlighted the potential of e-commerce for its Logistex materials handling business, as home shopping via the internet increases demand for sorting equipment. Announcing an increase in half-year profits, up 7.3% to £78.2m, FKI chief executive Bob Beeston said Logistex was well placed to benefit from the growth in internet commerce. Logistex was […]

FKI last week highlighted the potential of e-commerce for its Logistex materials handling business, as home shopping via the internet increases demand for sorting equipment.

Announcing an increase in half-year profits, up 7.3% to £78.2m, FKI chief executive Bob Beeston said Logistex was well placed to benefit from the growth in internet commerce.

Logistex was created earlier this year from FKI’s Mathews conveyor business and two firms acquired since: Industry General, a US-based handling systems maker, and Danish firm Crisplant Industries, a materials handling specialist.

These acquisitions boosted FKI’s materials handling division in the first half.

The company’s traditional engineering business also had a strong first half and is likely to be reinforced by selective acquisitions, Beeston said.

The business was helped by increasing demand from the US electricity industry, a rise which continued into the second half.

Beeston said FKI wanted to double its electrical engineering capacity, which would require both capital investment and bolt-on acquisitions.

The Crisplant and IGC acquisitions cost the company £230m, which is likely to be financed through cash reserves and borrowings.

FKI is also likely to dispose of some non-core businesses as the company looks to narrow its strategic focus. Businesses likely to be sold include parts of the hardware division, which includes doors, windows, castors and furniture activities.

`Some parts of the business are worth more to other people than to us,’ Beeston said. `We would consider some disposals at the right price to help finance the next stage of our expansion.’

Analysts estimate the company’s hardware division to be worth between £400m and £500m.

Last year it generated profits of £64.4m on sales of £327.9m.