Alumasc earnings on the rise

The firm has been boosted by strong trading at its Timloc housebuilding products division in Goole.

Alumasc said that Timloc had a record half year and following its success, Alumasc has plans to move to a new 88,000 sq ft facility in the East Yorkshire town by this autumn.

Chief executive Paul Hooper said: “Timloc has done extremely well. Sales are up 8 per cent and profit is ahead by 22 per cent.

“The division has strengthened its sales team and has been very nimble at setting off polymer cost increases.”

“We are cutting the ground at the new Goole site. We needed to move to gain additional capacity. There are currently 62 workers in Goole and as we bring in more work we could see an increase in numbers.”

Alumasc said that cost inflationary pressures have been mitigated through a combination of purchasing and supply chain initiatives and operational efficiencies.

The group said its strong revenue growth reflects progress in all areas although lower group margins reflect increased imported materials costs and continued investment to support growth.

“Group order books currently stand at £27.6m, close to record levels,” said Mr Hooper.

“Notwithstanding the ongoing economic uncertainties arising from the UK’s intended exit from the European Union and the current weakness in sterling, latest industry forecasts continue to anticipate modest growth in the UK construction market over the next few years.

The group said it is confident that Alumasc will make good progress beyond the current financial year.

Group revenues rose by 17 per cent to £50.7m in the six months to December 31. Sales to domestic markets grew by 9 per cent to £43.2m. This compares with UK construction market growth of around 1 per cent in the period.

Export sales almost doubled to £7.5m, led by continued penetration of the North American market.

Group operating margins reduced from 9.5 per cent to 8.2 per cent, reflecting the increased cost of imported materials following the depreciation of sterling. Margins are expected to be higher in the second half year thanks to price increases.

Analyst David Buxton at FinnCap said: “Interim results to December show decent underlying growth and place the group on track to achieve our full-year pre-tax profit forecast, although we slightly raise our 2018 forecast.

“Now solely focused on its building materials operations, it is seeing good growth at Levolux and from new products introduced over recent years.

“The shares remain deeply undervalued and now as a more focused, net cash business, growth prospects appear strong and the rating therefore compelling.”Timloc is the latest in a string of companies to move to Ozone Business Park in Howden, East Yorkshire.

Timloc is relocating from its Rawcliffe Road site in Goole. The new site is less than a mile from the M62.

Michael Leaf, divisional managing director at Timloc, said: “We are looking to expand our manufacturing and warehouse operations. To facilitate that, we need a modern, purpose-built building with better access to and from our site, but also to the motorway network.

“Ozone Business Park fulfils all those requirements, but crucially, is close to our current base in Goole, so the move will not impact negatively on our workforce.”