Further growth delivers another record performance

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 audited results for the year ended 31 December 2017.

Financial Results

 20172016 restatedChange
Revenue£411.7m£387.2m+6.3%
Underlying operating profit1£72.6m£68.5m+6.0%
Underlying operating margin117.6%17.7%-10bps
Underlying profit before tax1£65.7m£60.9m+7.9%
Operating profit£62.5m£60.9m+2.3%
Profit before tax£55.6m£53.5m+3.9%
Earnings per share from continuing operations (basic)22.7p21.8p+4.1%
Underlying earnings per share from continuing operations (basic)127.2p24.7p+10.1%
Leverage (times EBITDA2)1.61.90.3
Dividend per share11.1p10.1p+9.9%

 

On 31 January 2018, the Group announced that it had entered into advanced negotiations to sell Polypipe France Holding SAS (Polypipe France). The Board determined that the sale was highly probable at 31 December 2017 and accordingly the results for Polypipe France have been treated as discontinued. Comparatives for 2016 have been restated where necessary to reflect this treatment.

Financial Highlights

  • Revenue 6.3% higher at £411.7m
  • Underlying operating profit 6.0% higher at £72.6m
  • Underlying operating margin robust at 17.6% despite continued input cost inflation
  • Underlying basic earnings per share from continuing operations 10.1% higher at 27.2 pence
  • Net debt down to 1.6 times EBITDA2
  • Recommended final dividend of 7.5 pence per share giving a full year dividend of 11.1 pence per share, 9.9% higher

Operational Highlights

  • Strong performance in UK - revenue growth at 8.1%
  • Residential Systems segment revenue growth of 10.3% driven by demand in the new housebuild sector, RMI markets remain subdued
  • Disposal of Polypipe France for €16.5m on a cash-free, debt-free, normalised working capital basis expected to complete in the first half of 2018
  • Decisive action taken to close Dubai factory and pursue alternative manufacturing strategy in the Middle East
  • Management succession implemented, Paul James joined as CFO on 5 March 2018

Outlook

  • Fundamentals in Residential Systems segment continue to be strong, driven by the new housebuild sector but UK RMI likely to remain challenging
  • Commercial and Infrastructure project pipeline remains encouraging, although project delays impacting short-term performance
  • Benefit of selling price increases, due to the pass-through of further polymer and other cost inflation, expected to come through from second quarter
  • 2018 will be another year of progress for the Group and our expectations for the year remain unchanged

Martin Payne, Chief Executive Officer, said:

“Polypipe’s balanced business model, underpinned by the long-term growth drivers of legacy material substitution and continuing legislative tailwinds, has helped produce another record performance in 2017. Against the backdrop of a mixed UK construction market performance, continued political and economic uncertainty, and challenges in some overseas markets, Polypipe has delivered strong results in line with our expectations by focusing on its core strategic growth drivers. UK construction market performance is likely to remain mixed, but with continued focus on our customers and a balanced exposure to the different sectors within construction, we look forward to another year of progression in 2018.”

  1. Underlying profit and earnings measures are from continuing operations only and exclude certain non-underlying items 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. EBITDA is defined as underlying operating profit before depreciation and includes operating profit before depreciation from discontinued operations.

For further information please contact:

Polypipe

Martin Payne, Chief Executive Officer
Paul James, Chief Financial Officer
+44 (0) 1709 770 000

Brunswick

Nina Coad
Emma Walsh
+44 (0) 20 7404 5959

A copy of this report will be available on our website polypipe.com today from 0700hrs (GMT).

An analyst and investor presentation will be held today at Brunswick’s offices at 16 Lincolns Inn Fields, London, WC2A 3ED at 0900hrs (GMT) with registration from 0830hrs.

For those unable to attend, a live conference call will be available at 0900hrs (GMT).

UK Freephone Dial-In Number0800 376 7922

Standard International Dial-In number+44 (0) 2071 928000

Conference PIN 8298336

Access to the slide presentation during this live event is available at: this link.

Capital Markets Day

A Capital Markets day will be held on 9 May 2018 at 3.00pm at the offices of Numis Securities Ltd., The London Stock Exchange Building, 10 Paternoster Square, London, EC4M 7LT. Please contact Nina Coad or Emma Walsh at Brunswick for further details.

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 and European construction markets with a presence in Italy and the Middle East and sales to specific niches in the rest of the world.

View the Full Year Results

Date: 20 March 2018