Genuit Group expects operating profit to be at top-end of full year analyst expectations

Joe Vorih, the chief executive officer, said: “Genuit has made good progress in the first half of the year. Ongoing self-help measures, deployment of the Genuit Business System and continued business simplification enabled improvements in the quality of operating margin despite deteriorating market conditions.

“The group continues to make measurable progress towards our mid-term commitments. Our sustainability plans, including our science-based targets, are progressing well and we continue to focus on being the lowest carbon supplier of choice for our customers.

"Despite more challenging conditions notably in the residential new build and RMI markets, we upgraded market expectations in May and expect group full year operating profit to be at the top-end of current full year analyst expectations.

"While the economic situation remains challenging, we have good momentum moving into the second half as we focus on improving efficiency, creating value and enabling growth.”

In a statement, the group said it continues to make progress on operating sustainably, in order to be the lowest carbon supplier of choice for the group’s customers.

The statement added: "Climate Management Solutions revenue grew by 8.9 per cent, recovering from last year’s isolated cyber incident and benefitting from stronger demand for residential ventilation.

"To reduce the risk of a recurrence, the group has invested heavily in cyber defence and insurance for this business to bring it up to group standards.

"This step up in costs plus short term boiler market weakness contributed to an operating margin that was 400 basis points below last year, but this investment masked sequential underlying operating profit margin improvement since the second half of last year and which management expects to continue.”

Commenting on outlook, Genuit said: “ An improvement in market conditions in the current year is unlikely given the macroeconomic environment, though Genuit’s proven resilience provides scope for ongoing financial outperformance.”

Pent-up boiler and heating system demand is expected to be released as the economic situation stabilises, providing scope for recovery of demand within the climate management space, the statement added.

“We remain confident that the tailwind of increasing energy efficiency in heating and ventilation, stormwater management and lower carbon building materials will benefit our businesses. The benefits from self-help measures are building and give management the confidence that, notwithstanding the uncertain market backdrop, the group expects to deliver a financial performance at the top-end of current market expectations.”