Eurocell plc Trading Update (1819K)
12 December 2018 - 6:00PM
UK Regulatory
TIDMECEL
RNS Number : 1819K
Eurocell plc
12 December 2018
12 December 2018
EUROCELL PLC
(Symbol: ECEL)
Trading Update
Eurocell provides an update on its trading performance for the
11 months to 30 November 2018.
Trading and Operational Performance
We have continued to take market share and delivered strong
sales growth throughout all areas of our business, with revenue for
the 11 months to 30 November up 11% on last year (excluding
acquisitions).
-- In the Profiles division, growth reflects a good performance
from new build and trade fabricators alike, as well as the positive
impact of new account wins.
-- In the Building Plastics division, growth is being driven by
the increasing maturity of branches opened in the last two years.
Like-for-like growth rates have also remained robust.
-- The mix changes we experienced in the first half have
accelerated, with sales of co-extruded products in Profiles and
foiled products in both divisions now well ahead of
expectations.
Strong sales growth combined with significant mix changes has
continued to impact negatively the efficiency of our manufacturing
operations over the second half. As a result, the increased
manufacturing and distribution costs identified in our 2018 Half
Year Report continued into Q4.
Manufacturing efficiency has been improved through the following
actions:
-- An increase of 25% in new co-extrusion capacity, commissioned in H2 2018
-- Recruitment of additional trained labour resource in our foiling plant, also in H2 2018
-- Investment in new tooling for key products, with delivery in Q2 2019
Separately, we have also experienced a significant increase in
electricity prices in the second half, which has not yet been
recovered through selling price increases.
Therefore, whilst we continue to expect progress in EBITDA in
H2, this will now be at a lower rate than previously anticipated.
As a result, we now believe Adjusted EBITDA for the year ended 31
December 2018 will be slightly below 2017.
Strategic Initiatives
We continue to make good progress with our key strategic
initiatives, which include:
-- Recycling - integration of Ecoplas (acquired August 2018) proceeding in line with our plans
-- Branch network - new management team has made an excellent start:
- Ensuring a more consistent offering across the stores e.g.
sales of made-to-order value added products through branches up 12%
so far in 2018
- Expect 12 new branches in 2018, including the acquisition of
Kent Building Plastics in December 2018 (4 branches)
In addition, given the possibility for raw material supply
interruption due to Brexit, we have commenced a stock build
programme, which will continue through the first quarter of
2019.
Refinancing
In December, we refinanced our unsecured, multi-currency
revolving credit facility. The new GBP60 million facility (up from
GBP45 million) is being provided by Barclays Bank plc and HSBC UK
Bank plc and matures in December 2023. The new facility is
competitively priced, with the margin payable and key terms
remaining unchanged from the existing arrangements.
The increased flexibility provided by the refinancing, combined
with the strength of our balance sheet, places us in a good
position to deliver our strategic objectives.
Notice of Results
We will announce our preliminary results for the year ending 31
December 2018 on 15 March 2019.
Notes:
Eurocell plc is a market leading, vertically integrated UK
manufacturer, recycler and distributor of innovative window, door
and roofline PVC products.
Enquiries:
Eurocell plc
Mark Kelly, Chief Executive Officer
+44 (0) 1773 842 105
Michael Scott, Chief Financial Officer
+44 (0) 1773 842 140
Teneo
Ben Foster
+44 (0) 20 3603 5221
Camilla Cunningham
+44 (0) 20 3757 9235
END
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END
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