26th Mar 2015 10:38
LONDON (Alliance News) - Polypipe Group PLC Thursday reported a lower pretax profit in 2014 due to the costs of its initial public offering, although profit rose by half excluding these costs as the improvement in the UK construction market drove up revenue and it gave a positive outlook for 2015.
The maker of plastic piping systems for residential, commercial, civil and infrastructure projects reported a pretax profit of GBP16.9 million for 2014, down from GBP24.6 million in 2013, as it booked GBP20.8 million in costs for its IPO and the refinancing related to the listing last April.
Excluding those costs, its pretax profit rose to GBP38.6 million from GBP24.5 million as revenue grew to GBP327.0 million from GBP300.8 million and its operating margin improved to 14.2% from 13.2%
It declared a maiden final dividend of 3.00 pence, on top of the 1.50p interim dividend it previosuly announced.
Its UK revenue grew 12.4%, with sales up strongly in both its residential and its commercial and infrastructure divisions. However, revenue in its European commercial and infrastructure business fell 2.1% in local currency terms and were down 7.5% in pound terms due to the strength of sterling.
"The recovery in construction markets in the UK that started towards the end of 2013 took hold in 2014 and forecasts almost universally expect the outlook to remain positive in the medium term. Whilst it is difficult to predict whether there may be some short term impact of the impending General Election in the UK, it appears that whatever the final outcome, all parties are supportive of policies to stimulate the construction of more houses and of improving the national infrastructure," the company said.
"The economy in Europe and France in particular is more fragile and there is little evidence to suggest a significant improvement is likely in the near term. However, this represents only a relatively minor component of our overall business and as we do not envisage significant deterioration, believing that our slow and steady improvements to our French business will benefit in the medium term as the economy recovers," it added.
Polypipe added that it will continue to explore opportunities to grow exports, and although it could face some reduction in overall activity in its main export markets due to the sharp falls in oil prices, it has such a small market share that it thinks it can continue to grow.
"Our growth initiatives, combined with this positive market backdrop in our main UK market, mean we entered 2015 with optimism and at this early stage of the year we are confident that the group will deliver results for the year in line with market expectations," it said.
Separately, Polypipe said Senior Independent Director Ron Marsh will become its new chairman on May 27, replacing Alan Thomson who had announced he was stepping down nearly a year ago.
Marsh was appointed to the board of Polypipe last March. He is also a non-executive director of British Polythene Industries PLC and was, from 1989 until 2013, chief executive of RPC Group. He's also chairman of the UK-based Packaging Federation.
"I am very pleased that Ron has agreed to step up to the chairman role, he brings a wealth of industrial experience to the Board. As senior independent director he is very familiar with our business and I look forward to working with him as Polypipe develops as a public company. I would like to thank Alan for his invaluable guidance as chairman over the last seven years," Chief executive David Hall said in a statement.
Polypipe shares were down 1.2% at 262.75 pence Thursday morning. Its IPO price was 245p.
By Steve McGrath; [email protected]; @stevemcgrath1
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