Manufacturer reports rising revenues despite challenging market conditions

Doncaster-headquartered Polypipe, a manufacturer of plastic piping and ventilation systems, has seen revenues rise by 4.5% to £365.9m for the ten months ended 31 October.

This morning publishing a trading update for the ten-month period, the listed company also said like-for-like revenues had grown 10.2% in the four months to 31 October after seeing continued strong organic growth in its Residential Systems division, together with a “significant improvement in performance” in its Commercial and Infrastructure Systems segment.

Revenue for the ten months ended 31 October 2018 was 4.5% higher than the prior year at £365.9m (2017: £350.2m), and 4.1% higher on a like for like basis.

Polypipe, which acquired Permavoid in August and Manthorpe Building Products in October 2018, said: “Revenue in our Residential Systems segment in the four months ended 31 October 2018 increased 11.5% on a like-for-like basis compared to the same period last year, driven by continued strong demand from new housebuild and an element of catch up after the disruption caused by adverse weather at the end of the first quarter of this year. Both private and public RMI markets remain challenging. Revenue for the ten months ended 31 October 2018 is 8.1% higher than the prior year on a like for like basis, and 8.3% on a reported basis, including 5 working days contribution from the recently acquired Manthorpe Building Products business.”

It said its Commercial and Infrastructure Systems improvement had been driven partly by some improved market conditions with UK roads programmes beginning to gather pace, as well as b new product introductions such as its Fuze HDPE electrofusion tall building soil and waste solution, and a new large diameter sewer and drainage range produced on our continuous corrugator commissioned early this year.

Second half operating margins will be higher than in the equivalent period in 2017, driven by improved profit performance in the Middle East following closure of the manufacturing facility in late 2017 and operational leverage on higher volumes, offset by the relative growth in lower margin new housebuild.

The Group has renewed its £300m secured Revolving Credit Facility (RCF) effective from 19 November 2018 until November 2023.

Martin Payne, Chief Executive Officer,  said: “I am delighted with the Group’s performance so far in the second half, and in particular the marked improvement in our Commercial and Infrastructure Systems segment. The Group continues to deliver strong organic growth ahead of the overall UK construction market and is well placed to achieve the Board’s expectations for the full year. I am also pleased that we now have committed credit facilities in place through to 2023, which gives us a solid platform to deliver on our strategic objectives in the coming years.”