Interim results for the six months ended 30 June 2017

Continued strong performance

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 announces its unaudited interim results for the six months ended 30 June 2017.

Financial Results

H1
2017
H1
2016
Change
Revenue£242.0m£223.3m8.4%
Underlying operating profit1£38.9m£37.7m3.1%
Underlying operating margin116.1%16.9%
Underlying profit before tax1£35.5m£33.7m5.3%
Operating profit£34.9m£33.9m2.8%
Profit before tax£31.5m£29.9m5.3%
Earnings per share (diluted)12.5p12.0p4.2%
Underlying earnings per share (diluted)114.3p13.5p5.9%
Cash generated from operations£21.1m£30.5m(30.8)%
Dividend per share3.6p3.1p16.1%

Financial Highlights

  • Performance in line with management expectations
  • Revenue 8.4% higher at £242.0m, or 6.9% on a like for like basis2
  • UK revenue 6.8% ahead
  • Underlying operating profit 3.1% higher at £38.9m
  • Underlying diluted earnings per share 5.9% higher at 14.3 pence per share
  • Net debt of 2.0 times LTM EBITDA3 compared to 2.3 times in the prior year, and on track to meet management expectations for the year
  • Interim dividend increased 16.1% to 3.6 pence per share

Operational Highlights

  • Market outperformance in both UK segments, demonstrating continued success of strategic growth initiatives of legacy material substitution, carbon efficiency and water management.
  • UK Residential Systems segment particularly strong with 9.2% growth driven predominantly by new house build.
  • Pricing actions to recover H2 2016 input cost inflation progressively implemented through first half and successfully completed.
  • Decisive action taken at our Middle East manufacturing plant (<1% Group revenue) to temporarily cease manufacturing and reduce costs in response to recent trade embargo between UAE and Qatar.

Outlook

  • Market fundamentals continue to be robust, but we remain alert to potential impact from uncertainties arising from the recent UK election and Brexit negotiations.
  • Following a slow start to the year, the UK Roads programme is expected to accelerate in H2, underpinning demand in our UK Commercial and Infrastructure Systems segment.
  • With different sectors of the UK construction market performing at different rates the Group benefits from its strategic balance of activity with no over reliance on any one sector.
  • Middle East situation unlikely to be resolved in the short term.
  • Conditions in the French market continue to improve.
  • Well placed to continue to deliver results in line with management expectations for the year ending 31 December 2017.

David Hall, Chief Executive Officer said:

“The Group has delivered another record performance, building on the strong momentum from last year and demonstrating that our strategic focus on structural growth opportunities is delivering results.

Although underlying fundamentals remain positive, the Group has experienced varying conditions in its different markets and has also faced some challenges in the first half of the year. I am encouraged by the way the business has risen to these challenges which is further evidence of the depth and strength of management across the Group. As a result of our growth initiatives, balanced exposure to our markets and overall performance, the Board is confident that the Group will continue to make progress in line with management expectations for the year.”

  1. Underlying profit and earnings measures exclude certain non-underlying items which are provided in Note 4, and where relevant, the tax effect of these items. The Directors consider that these measures provide a better and more consistent indication of the Group’s underlying financial performance and more meaningful comparison with prior and future periods to assess trends in our financial performance.
  2. 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.
  3. LTM EBITDA is defined as underlying operating profit before depreciation for the twelve months preceding the balance sheet date

For further information please contact:

Polypipe

David Hall, Chief Executive Officer
Martin Payne, Chief Financial Officer
+44 (0) 1709 770 000

Brunswick

Tim Danaher
Simon Maine
+44 (0) 20 7404 5959

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.

Date: 08 August 2017