Polypipe Group PLC Trading Update (3724W)
14 November 2017 - 6:00PM
UK Regulatory
TIDMPLP
RNS Number : 3724W
Polypipe Group PLC
14 November 2017
Polypipe Group plc
Trading Update
___________________________________________________________________________________
14 November 2017
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 2017.
Trading update
Strong organic growth in our UK Residential Systems and Mainland
Europe segments, both helped by relatively buoyant new house
building activity, has driven continued growth ahead of the market
in the ten months ended 31 October 2017, leaving the Group on track
to achieve management expectations for the full year.
Revenue for the ten months ended 31 October 2017 was 8.2% higher
than the prior year at GBP400.6m (2016: GBP370.3m), and 7.1% higher
on a like for like* basis. Like for like revenue growth in the four
months to 31 October 2017 was marginally higher than that recorded
in the first half of the year at 7.3%.
The following table sets out Group revenue by operating
segment:
Ten months ended Four
31 October Months
ended
31 October
2017
------------------------------------------------- ------------
LFL LFL
2017 2016 Change Change* Change*
Revenue GBPm GBPm % % %
--------------------------------- ------------- ------------ --------- --------- ------------
Residential Systems 193.1 175.7 9.9 9.9 11.1
Commercial and Infrastructure
Systems - UK 161.6 155.8 3.6 3.6 1.0
Inter-segment sales (11.3) (8.8)
------------- ------------
UK operations 343.4 322.7 6.4 6.4 6.0
Commercial and Infrastructure
Systems - Mainland
Europe 58.9 49.0 19.9 11.2 16.0
Inter-segment sales (1.7) (1.4)
Group 400.6 370.3 8.2 7.1 7.3
--------------------------------- ------------- ------------ --------- --------- ------------
*Like for like (LFL) measures are at constant currency
translation. The structure of the Group is the same in both periods
so no adjustment is necessary for acquisitions or disposals.
UK operations
Our UK operations achieved revenue growth of 6.4% in the ten
months ended 31 October 2017. The price increases implemented
progressively throughout the first half of this year account for
approximately 3.0%, leaving volume growth at 3.4%, ahead of the
market.
Revenue in our UK Residential Systems segment increased 9.9%
compared to the same period last year, driven by continued strong
demand from new housebuild, with strong underground demand
beginning to be matched latterly by strengthening demand for above
ground products as developers start to build out newly developed
sites. Both private and public RMI markets remain difficult. Our UK
Commercial and Infrastructure Systems segment delivered solid
growth of 3.6%, for the ten months ended 31 October 2017 despite
strong comparables, delays in some of the larger roads and
commercial building projects in the UK, and the continued issues in
the Middle East. Our manufacturing facility in Dubai (for which the
results are reported in this UK segment) remains closed, and the
Qatar situation shows no sign of improving. A limited number of
small projects outside Qatar continue to be supplied from Dubai and
the situation regarding manufacturing in Dubai remains under
review.
Second half UK operating margins will be higher than in the
equivalent period in 2016 following first half price increases to
recover post EU Referendum polymer and other inflationary cost
increases. However, further polymer cost inflation driven by
currency movements and tightening global supply during the year
means that full year operating margins in the UK will be marginally
behind the prior year. Further price increases are planned for the
new year to recover this cost inflation.
Mainland European operations
Revenue for the ten months ended 31 October 2017 was 19.9% ahead
of the prior year, and on a like for like basis was 11.2% ahead.
The general economic environment in France continues to be helpful
with our business capitalising on this and performing well. The
business continues to be profitable but at lower margins than the
UK.
Martin Payne, Chief Executive Officer, commented:
"Whilst the UK new housebuild market continues to perform well
helped by increasing demand for our water management and
attenuation products, commercial, infrastructure and RMI markets
remain challenging. Against this backdrop, the Group continues to
deliver strong organic growth ahead of the overall UK construction
market, demonstrating the resilience of its balanced exposure to
the different sectors within that market, and the continued success
of its strategic growth pillars of legacy material substitution and
legislative tailwinds in water management and carbon efficiency.
Whilst we remain vigilant in the face of continued political and
economic uncertainty, we believe the Group is well placed to
achieve management expectations for the full year."
For further information, please contact:
Enquiries:
Polypipe +44 (0) 1709 770 000
Martin Payne, Chief Executive Officer
Brunswick +44 (0) 2074 045 959
Tim Danaher
Will Rowberry
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 20 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 company news service from the London Stock Exchange
END
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