Polypipe expects to achieve good profit growth despite flooding
POLYPIPE, ONE of Europe’s biggest manufacturers of plastic pipe systems, expects its full-year underlying operating profit to be just below previous expectations, after contractors were unable to access some sites due to flooding.
The Doncaster-based company said it expects to report good growth in profits, despite challenging market conditions and the impact of the severe weather.
Polypipe is the largest manufacturer in the UK of plastic piping systems for the residential, commercial, civils and infrastructure sectors by revenue. It is also a major designer and manufacturer of energy efficient ventilation systems in the UK.
The company has issued a trading update for the 10 months ended October 31, 2019.
The company said it had achieved a resilient performance in tough markets with group revenue 4.3 per cent higher at £381.7m.
Polypipe said there had been continued good contribution from its acquisitions, which are performing well and the M&A (merger and acquisitions) pipeline remains encouraging.
The statement added: “Trading in the last four months reflects strong 2018 comparatives and short term political and economic uncertainty impacting our markets, with group revenue 1.7 per cent higher than the prior year. Since the end of October, this has been compounded by flooding and poor ground conditions, most notably in the North and the Midlands, meaning contractors and developers have not been able to access sites for civils and groundworks activities
“Against this backdrop, the board now expects underlying operating profit for the year to be just below its previous expectations.”
Martin Payne, the chief executive officer, said: “Despite increasingly challenging market conditions and the impact of the recent severe weather, we still expect to report good growth in profits, albeit just below our previous expectations.”
He added: “Fundamentals in the group’s markets remain strong, with a structural housing shortage, historically low interest rates, real wage growth and near full employment which means that we view our future prospects with confidence.”