Chairman's Introduction

Ron Marsh

I am delighted to present the Polypipe 2017 Annual Report and Accounts following another excellent year for the Group.

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Chief Executive Officer's Review

Martin Payne

In my first review since appointment as Chief Executive Officer, I am pleased to report that Polypipe has delivered another record performance in 2017

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Chief Financial Officer's Report

Martin Payne

Group revenue at £411.7m was 6.3% higher than the prior year.

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HIGHLIGHTS

Financial Highlights

Revenue

Increase 6.3%

Revenue 2017

Underlying operating profit

Increase 6.0%

Underlying operating profit 2017

Profit before tax

Increase 3.9%

Profit before tax 2017

Operating cashflow after net capex*

Decrease 14.9%

*Before non-underlying items.

Operating cashflow after net capex 2017

Underlying basic EPS from continuing operations

Increase 10.1%

Underlying basic EPS from continuing operations
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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

OUR INVESTMENT CASE

Building from a position of market leadership in the UK, where the Company is the largest plastic piping systems manufacturer (by sales volume) and largest light commercial ventilation manufacturer, Polypipe continues to invest in order to maintain and develop its position as a leader in the management and movement of air and water. This investment and scale provides both operational efficiency and considerable economic reach to serve the broadest range of customers.

Based on a core offer of plastic piping, supported by complete system performance design, incorporating engineered in-house manufactured fittings and ancillaries, Polypipe is uniquely placed to offer a differentiated total solution to those from other plastic pipe manufacturers. It is able to pursue significant growth opportunities by developing effective solutions to new and emerging legislation, in addition to providing customers with a high performance alternative to pipes manufactured from legacy materials such as clay, copper and concrete in each of the sectors the Company serves. In this way, Polypipe’s sales growth has consistently outperformed the construction market.

Polypipe’s focus on value addition through engineered solutions, its above-market growth and its commitment to investment leverages an existing operational footprint to generate incremental profitability, which allows Polypipe to deliver a strong and resilient financial performance.

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OUR VISION AND STRATEGY

OUR VISION

To be the leading provider of sustainable and resilient water and climate management solutions for the built environment

Footprint Water

We will do this by building a world-class sustainable business and by leveraging our core UK competencies across key markets around the world.

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OUR STRATEGIC OBJECTIVES

1

SUSTAINABLE WATER MANAGEMENT SOLUTIONS

2

SUSTAINABLE CLIMATE MANAGEMENT SOLUTIONS

3

LEGACY MATERIAL SUBSTITUTION

4

PROPOSITION AHEAD OF LEGISLATIVE TAILWINDS

5

GEOGRAPHIC REACH

6

COMPLEMENTARY ACQUISITIONS

7

CONTINUOUS INVESTMENT IN PROCESSES AND EFFICIENCY INITIATIVES

OUR SUSTAINABLE JOURNEY

At Polypipe, our commitment to sustainability flows from our way of working, to build and develop a sustainable business, through to taking solutions to market that are by nature of their application enabling a sustainable and resilient built environment.

Sustainable inputs

Sustainable
inputs

Enforcing quality reinforces productivity. All of our raw materials, whether prime or recycled polymers, are sourced to a strict sustainable policy and this ensures all suppliers meet the highest standards. With ISO 9001 Quality Management and ISO 14001 Environmental Management accreditation, we only manufacture with the very best materials.

Sustainable process

Sustainable processes

Polypipe does not just recycle all in-process material waste; we monitor every process and pursue continuous improvement in our operations to make a bigger difference. For example, we reduce power and water consumption by metering usage at machine level.

Sustainable materials

Sustainable materials

Polypipe is proud to manufacture plastic pipes that are strong yet light in weight. This fact alone helps towards considerably reducing fuel consumption in transportation, lowering health and safety risks on-site and, as we know, our products can be recycled at the end of the life.

Sustainable solutions

Our products are not only sustainably produced, but they enhance sustainability in their installation and everyday use. For example, they save energy, reduce CO2 emissions and manage water as a valuable resource. Systems such as our underfloor heating, Mechanical Ventilation with Heat Recovery and geocellular solutions provide the most comprehensive range available in our market to meet these requirements. Recycling is also an integral part of this philosophy.