Polypipe delivers 'resilient' performance as UK housing sector recovers faster than expected

Polypipe Group plc has issued an update on trading for the four months ended 31 October 2020.

The statement said there had been a sustained recovery, with group revenue for the four months ended October 31 2020 ahead of the board’s expectations and only 1.5 per cent lower than the prior year at £156.1m with continued improvement throughout the period

Polypipe is the largest UK-based manufacturer of plastic piping systems for the residential, commercial, civils and infrastructure sectors by revenue. It is also a leading designer and manufacturer of energy efficient ventilation systems.

Operating margins have also improved when compared with the first six months as volumes recovered despite the group facing extra costs linked with COVID-19.

Although uncertainty remains around the possible effects of the second lockdown, the board expects underlying operating profit for the year to be at least £35m, compared with the current consensus range of £30m to 35m,

The statement added: "The group remains highly cashflow generative and at 31 October 2020 net debt was £32.4m. This is better than the board’s expectations and reflects recent trading performance

"The group has resumed capital expenditure investment to pursue growth opportunities and product development and repeats its guidance of spending circa £20m-25m for this year

"The medium-term fundamentals of our markets remain robust."

The residential systems segment’s revenue for the four months ended October 31 2020 was 3.9 per cent lower than the prior year; compared with 28.1 per cent year-on-year decline in the first half. This has been driven by the UK housing market recovering faster and stronger than expected, Polypipe said.

Revenue for the 10 months ended 31 October 2020 was 18.0 per cent lower than the prior period.

The commercial and infrastructure segment’s revenue for the four months ended 31 October 2020 was 1.9 per cent higher than the prior year.

Martin Payne, the company's chief executive, commented: “The group’s end markets in the UK have continued to recover ahead of expectations, and I am pleased that the group’s resilient performance in the last four months has reflected this.

"I would like to thank our colleagues around the group for their continued dedication and support in achieving these results.

"The government in its national lockdown announcements has been clear that construction, manufacturing, and the housing market should all continue to operate normally subject to operating in a COVID-19 safe environment.

"Whilst still early days into lockdown, there are no signs of any significant changes to demand patterns.

"Looking into 2021, we have strong medium-term fundamentals in our markets, and sustainability at the heart of our business, although we remain alert to the broader macro related risks in the market. The board remains confident that the group is well positioned for the future”.

Support The Yorkshire Post and become a subscriber today. Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers. Click here to subscribe.