Beast from the East dents Polypipe

Polypipe'‹, one of Europe's biggest manufacturers of plastic pipe systems,'‹'‹ said the Beast from the East snowfall resulted in an Â£8m reduction in revenue.

Despite this, the Doncaster-based firm said it is confident of delivering full year expectations.

Revenue fell 1 per cent in the first four months of 2018 to £135.7m as the bad weather in late February and early March prevented its customers from working on site.

Polypipe told shareholders at its AGM in Doncaster that revenue for the four months to April 30 was 0.9 per cent lower at £135.7m, down from £136.9m in the first four months of the previous year.

The firm said underlying revenue growth, excluding the impact of the adverse weather, was approximately 5 per cent. Trading in the latter part of April, after the effects of the adverse weather had passed, was consistent with this adjusted growth rate.

The group said its Residential Systems division delivered strong organic revenue growth, driven by a buoyant new house build market.

Revenue performance in its Commercial and Infrastructure Systems division experienced a continuation of the trends highlighted at the full year results in March, with project delays in road and other commercial projects hitting short-term performance.

Polypipe said the latest forecasts from the Construction Products Association show a broadly flat construction market for 2018.

The firm said that with continued focus on the core elements of its strategy, it remains well placed to increase revenue ahead of the market.

Analyst Graeme Kyle at Shore Capital said: "Group revenues declined by 0.9 per cent year on year to £135.7m which is significantly lower than we and the market had expected.

"However, management cite that excluding the adverse weather conditions in February and March, revenues would have grown by 5 per cent, which is actually higher than our full year revenue growth forecast of 4.3 per cent. The board’s 2018 expectations remain unchanged, despite short term project delays in various infrastructure as previously flagged and principally as a result of the Carillion fallout.

"We retain our 2018 forecasts and 'buy' recommendation."

Polypipe will report its interim results for the six months to June 30 on August 14.