12th Dec 2018 12:33
LONDON (Alliance News) - Eurocell PLC on Wednesday said it expects its annual earnings to come in below 2017, hurt by an increase in manufacturing and distribution costs.
The stock was trading down 9.5% on midday Wednesday at 210.00 pence a share.
The UPVC products supplier said it delivered strong sales growth throughout all areas of its business, with revenue for the 11 months to November 30 up 11% year-on-year. The result excludes acquisitions, the company noted.
In the Profiles division, which makes fittings for windows, doors and conservatories, growth was boosted by a good performance from new build and trade fabricators alike, as well as the positive impact of new account wins.
In the Building Plastics division, which distributes roofline building products, growth was driven by the increasing maturity of branches opened in the past two years. Like-for-like growth rates have also remained robust.
Eurocell noted that a significant mix change has continued to hurt the efficiency of its manufacturing operations over the second half of the year. As a result, the increased manufacturing and distribution costs identified in the first half have continued into the final quarter of 2018, the company said.
Looking ahead, Eurocell said it recruited additional trained labour resource and invested in new tooling for key products to improve the manufacturing efficiency.
As a result, Eurocell now anticipates adjusted earnings before interest, taxes, depreciation, and amortization to be lower than in the prior year. In 2017, Eurocell reported adjusted Ebitda of GBP23.1 million.
The company will report its annual results on March 15.
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