Polypipe Group PLC Trading Update (8356H)
November 20 2018 - 2:01AM
UK Regulatory
TIDMPLP
RNS Number : 8356H
Polypipe Group PLC
20 November 2018
Polypipe Group plc
Trading Update
____________________________________________________________________________________________________
20 November 2018
Polypipe Group plc ("Polypipe", the "Company" or the "Group"), a
leading manufacturer of plastic piping and ventilation systems for
the residential, commercial, civils and infrastructure sectors,
today issues an update on trading for the ten months ended 31
October 2018. Trading is in line with the Board's expectations and
our outlook for the full year is unchanged.
Trading update
Continued strong organic growth in our Residential Systems,
together with a significant improvement in performance in our
Commercial and Infrastructure Systems segment, has delivered like
for like* revenue growth of 10.2% in the four months ended 31
October 2018.
Revenue for the ten months ended 31 October 2018 was 4.5% higher
than the prior year at GBP365.9m (2017: GBP350.2m), and 4.1% higher
on a like for like* basis.
The following table sets out Group revenue by operating
segment:
Ten months ended 31 October Four Months
ended 31
October
2018
------------------------------------------ ------------
LFL LFL
2018 2017 Change Change* Change*
Revenue GBPm GBPm % % %
------------------------------- --------- ------- ---------- ---------- ------------
Residential Systems 204.3 188.6 +8.3 +8.1 +11.5
Commercial and Infrastructure
Systems 161.6 161.6 - -0.6 +8.6
Group 365.9 350.2 +4.5 +4.1 +10.2
*Like for like (LFL) measures are at constant currency
translation adjusted for the disposal of France in March 2018 and
the acquisition of Permavoid and Manthorpe Building Products in
August and October 2018, respectively.
Revenue in our Residential Systems segment in the four months
ended 31 October 2018 increased 11.5% on a like-for-like basis
compared to the same period last year, driven by continued strong
demand from new housebuild and an element of catch up after the
disruption caused by adverse weather at the end of the first
quarter of this year. Both private and public RMI markets remain
challenging. Revenue for the ten months ended 31 October 2018 is
8.1% higher than the prior year on a like for like basis, and 8.3%
on a reported basis, including 5 working days contribution from the
recently acquired Manthorpe Building Products business.
Performance in our Commercial and Infrastructure Systems segment
has seen a significant improvement since the half year and has
delivered revenue growth of 8.6% on a like-for-like basis for the
four months ended 31 October 2018. This improvement has been driven
partly by some improved market conditions with UK roads programmes
beginning to gather pace, but also more significantly from
successful new product introductions such as our Fuze HDPE
electrofusion tall building soil and waste solution, and the new
large diameter sewer and drainage range produced on our continuous
corrugator commissioned early this year. Revenue for the ten months
ended 31 October is 0.6% lower than prior year on a like-for-like
basis, and flat on a reported basis including a two-month
contribution from Permavoid.
Second half operating margins will be higher than in the
equivalent period in 2017, driven by improved profit performance in
the Middle East following closure of the manufacturing facility in
late 2017 and operational leverage on higher volumes, offset by the
relative growth in lower margin new housebuild. This performance
will deliver full year profits in line with management
expectations.
The integration of recent acquisitions, Permavoid (August 2018)
and Manthorpe Building Products (October 2018) into the Polypipe
Group is progressing well, albeit in its early stages.
Refinancing
The Group has renewed its GBP300m secured Revolving Credit
Facility (RCF) effective from 19th November 2018 until November
2023 with two further uncommitted annual renewals through to
November 2025 possible. In addition, there is a new uncommitted
"accordion" facility of up to GBP50 million. The new RCF is being
provided by the Group's principal relationship banks, namely Lloyds
Bank plc, National Westminster Bank plc and Santander UK plc, with
HSBC UK Bank plc and Citibank N.A., London Branch as new
participants in the syndicate. Refinancing fees of GBP1.7m will be
amortised over the life of the facility. Unamortised fees of GBP0.6
million from the previous refinancing will be written off through
non-underlying items in the financial statements for the year
ending 31 December 2018. The margin payable under the renewed
facility is 10 basis points lower than the previous agreement for
gearing levels up to 2.0x EBITDA. The refinancing arrangements are
therefore competitively priced and bring greater operational
flexibility to deliver future strategic objectives.
Martin Payne, Chief Executive Officer, commented:
"I am delighted with the Group's performance so far in the
second half, and in particular the marked improvement in our
Commercial and Infrastructure Systems segment. The Group continues
to deliver strong organic growth ahead of the overall UK
construction market and is well placed to achieve the Board's
expectations for the full year. I am also pleased that we now have
committed credit facilities in place through to 2023, which gives
us a solid platform to deliver on our strategic objectives in the
coming years."
For further information, please contact:
Enquiries:
Polypipe +44 (0) 1709 770 000
Martin Payne, Chief Executive Officer
Paul James, Chief Financial Officer
Brunswick +44 (0) 2074 045 959
Nina Coad
Dan Roberts
Notes to Editors:
Polypipe is the largest manufacturer in the UK, and among the
ten largest manufacturers in Europe, of plastic piping systems for
the residential, commercial, civils and infrastructure sectors by
revenue. It is also a leading designer and manufacturer of energy
efficient ventilation systems in the UK.
The Group operates from 17 facilities in total, and with over
20,000 product lines, manufactures the UK's widest range of plastic
piping systems for heating, plumbing, drainage and ventilation. The
Group primarily targets the UK, French and Irish building and
construction markets with a presence in Italy and the Middle East
and sales to specific niches in the rest of the world.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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