Polypipe raises profit forecasts as it hails performance

The Doncaster-based firm, one of Europe’s biggest manufacturers of plastic pipe systems, said group revenue for November was 8 per cent higher, with residential markets performing particularly well.

The group said it enters the new year with a strong order book and some cautious optimism, although uncertainty currently exists about the effects of a no-deal Brexit.

The firm said operating margins are still not back to normal levels due to operating inefficiencies caused by Covid-19. However, it now expects underlying operating profit to be around £40m for the year to December 31, compared with the current consensus range of £35m to 37m.

Analyst Graeme Kyle at Shore Capital said: “Polypipe has increased its 2020 EBITA guidance to £40m, versus our pre-announcement forecast of £35.9m.

“Polypipe is an innovative manufacturer of building materials including a significant number of products aimed squarely at the growing environmental market. We continue to like its diversified end markets, sizeable entry barriers and exposure to secular growth. We upgrade our recommendation to Buy with a fair value of 560p per share.”

Polypipe is the UK’s largest manufacturer of plastic piping systems for the residential, commercial, civils and infrastructure sectors.