13th Mar 2020 08:44
(Alliance News) - Eurocell PLC on Friday reported profit and revenue growth in 2019, with profit being held back by higher costs, on strong sales growth from its two businesses.
In 2019, the plastic windows and doors maker recorded pretax profit of GBP23.1 million, 4.5% higher than the GBP22.1 million seen in 2018.
Revenue was 10% higher year on year in 2019 at GBP279.1 million from GBP253.7 million.
Eurocell upped its final dividend by 3.2% to 6.4 pence, resulting in its total dividend growing 3.2% in 2019 to 9.6p from 9.3p in 2018.
"We have reported robust financial results for 2019 and, despite Brexit-related and political uncertainty, delivered another year of strong sales growth and a good improvement in gross margin," Chief Executive Mark Kelly said.
Eurocell's Profiles unit saw 5% like-for-like sales growth, with Building Plastics reporting 8% like-for-like sales growth.
Kelly continued: "Over the last 4 years, successful deployment of our commercial strategies has led to sales substantially exceeding our expectations. However, profits have been impacted more recently as we build the operating capacity to service our sales and we have experienced inefficiencies and extra costs."
The company's administrative costs jumped 17% to GBP98.1 million and distribution costs rose 9.2% to GBP20.2 million.
"With manufacturing constraints now resolved, our focus for 2020 will be on executing the warehouse transition successfully, thereby facilitating future growth and the delivery of further operating efficiencies. As a result, looking forward we see good potential to outperform our markets," Kelly added.
Turning to the deadly new coronavirus outbreak, Eurocell said it has seen no "discernible impact" on its business, but remains "very alert" to the possibility.
The CEO commented: "We have a strong balance sheet, and in March 2020 we were pleased to increase our bank facility to GBP75 million. We maintain a conservative approach to debt, in order to ensure good liquidity and to manage any emerging risks.
"Despite the impact of very wet weather so far this year, we have made a good start to 2020. Sales and margins for the first two months are in line with our expectations, and notwithstanding macroeconomic and political uncertainty, we expect to deliver further progress this year."
Shares in Eurocell were 1.4% higher in London on Friday morning at 220.00 pence each.
By Paul McGowan; [email protected]
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