4th Sep 2020 09:00
(Alliance News) - Eurocell PLC on Friday reported a loss for the first half as its sales took a hit from the coronavirus pandemic.
In the six months to June 30, the PVC window, door, conservatory and roofline products manufacturer sunk to a GBP16.5 million pretax loss from a GBP10.4 million profit the year before.
Eurocell's revenue plunged 31% year on year in the first half to GBP93.6 million from GBP136.3 million. Third-party revenue was down 37% to GBP36.4 million and like-for-like sales dropped 4%.
The company's performance for the 11 weeks to March 20 were in line with expectations, with like-for-like sales up 3%, but then Eurocell was forced to temporarily close its business in line with official guidance from the UK government on March 23.
Post-period, however, Eurocell noted its like-for-like sales over July and August were up 12%, with 2% growth in its Profiles unit and 20% growth in its Building Plastics unit.
Chief Executive Mark Kelly said: "Covid-19 has created unprecedented challenges. Our first priority continues to be the health, safety and well-being of our employees. Through their hard work and dedication, we have implemented safe working practices in line with recommended guidelines, and I would like to thank them all for their continued commitment and support.
"In response to the pandemic, we took a number of swift and decisive actions to safeguard the future of the business, and we were grateful to receive support from investors with the share placing in April. As a result, the business was well prepared to re-open in May."
A part of this decision was to cancel its interim dividend but it intends to return to paying dividends in 2021.
"Since re-opening, sales have exceeded our initial expectations, particularly in the branch network, and we have been encouraged by recent market trends. We are pleased that operating efficiencies have been better and that gross margins are improving as volumes increase. The actions we took to strengthen the business have left us well placed to capitalise on opportunities and continue to take market share," Kelly said.
Eurocell said its focus for the remainder of 2020 will be on executing its warehouse transition successfully.
Kelly added: "Whilst the current levels of uncertainty mean it is difficult to predict the outcome for the full year and beyond, we are pleased that the second half has started strongly. We continue to see good potential to outperform our markets and it is our intention to return to paying dividends in 2021."
Shares in Eurocell were down 4.0% in London on Friday morning at 180.00 pence each.
By Paul McGowan; [email protected]
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