Record revenue and profits, strong strategic progress

Polypipe Group plc (“Polypipe” or the “Group”), a leading manufacturer of plastic piping and ventilation systems for the residential, commercial, civils and infrastructure sectors, today announces its full year results for the year ended 31 December 2015.

Financial Results

 20152014Increase
Revenue£352.9m£327.0m8%
Underlying operating profit£54.2m£46.3m17%
Underlying operating margin15.4%14.2% 
Underlying profit before tax£48.0m£37.6m28%
Profit before tax£41.5m£16.9m 
Underlying earnings per share19.47p16.11p21%
Earnings per share (basic)17.11p6.96p 
Interim dividend - declared and paid2.3p1.5p* 
Final dividend - recommended5.5p3.0p* 

*part year (eight months post IPO period in 2014)
Non-underlying items related almost entirely to costs associated with the acquisitions during 2015 and the IPO in 2014

Financial Highlights

  • Revenue from UK operations increased by 10.6%. Group revenue was up 7.9%
  • Underlying operating profit ahead by 17.1% at £54.2m
  • 120bps improvement in underlying operating margin to a record 15.4%
  • Strong cash conversion of 102%, after absorbing a 28% increase in capital expenditure
  • Underlying net finance costs reduced by £2.5m to £6.2m due to benefits from re-financing
  • Recommended final dividend of 5.5 pence per share giving a full year dividend rate increase of 23%

Operational Highlights

  • Significant boost to technical capability and presence in the ventilation market through the £144.3m acquisition of Nuaire in August 2015. Nuaire is performing in line with expectations
  • Structural growth opportunities driving the business ahead of the overall construction market
  • Continuing strong demand from residential new build construction, infrastructure and commercial developments
  • Improved export performance underpinned by growing presence in the Middle East
  • Capital expenditure increased by 28% to £19.3m to fund growth opportunities

Outlook

  • Whilst there remain political and economic uncertainties, underlying fundamentals across all sectors of the UK construction market remain positive
  • In our main UK market, 2016 industry forecasts expect that construction activity will outpace GDP
  • 2016 has started well and we are encouraged by reports from the merchants of improvement in RMI spend in the early part of this year.

David Hall, Chief Executive said:

2015 was a record performance and another year of excellent progress for the Group. The acquisition of Nuaire was an important step in our strategic development and our growth initiatives continued to deliver. I am delighted to report such a strong performance since our IPO in April 2014, with underlying operating profit growth of 36.5% over the last two years. While there are economic and political uncertainties, 2016 has started well and the Board is confident that the market fundamentals in our main UK market remain positive and that we are pursuing a sound strategy for the future development of the business”.

Enquiries:

Polypipe

David Hall, Chief Executive Officer
Peter Shepherd, Chief Financial Officer
+44 (0) 1709 770 000

Brunswick

Mike Smith
Nina Coad
+44 (0) 20 7404 5959

A copy of this report will be available on our website http://ir.polypipe.com/ today from 7.00am.

An analyst and investor presentation will be held today at 16 Lincoln’s Inn Fields, London, WC2A 3ED, at 0915hrs (BST) with registration from 0845hrs.

For those unable to attend, a live conference call will be available at 0915hrs (BST).
Dial-In number +44 (0) 1452 555566
Conference ID 72914704

Notes to Editors:

Polypipe is the largest manufacturer in the United Kingdom, and among the ten largest manufacturers in Europe, of plastic piping systems for the residential, commercial, civils and infrastructure sectors by revenue. The recently acquired Nuaire business is a leading designer and manufacturer of energy efficient ventilation systems in the UK.

The Group operates from nineteen facilities in total, and with over 20,000 product lines, manufactures the United Kingdom’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.

Preliminary Results 2015

Date: 31 March 2016